ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
VMOTO LIMITED ABN 36 098 455 460
CORPORATE DIRECTORY
DIRECTORS
Mr Charles Chen – Managing Director
Mr Ivan Teo – Finance Director
Mr Blair Sergeant – Non-Executive Director
Mr Kaijian Chen – Non-Executive Director
Ms Shannon Coates – Non-Executive Director
BANKER
National Australia Bank
Level 14, 100 St Gerges Terrace
Perth, Western Australia 6000
Australia
SOLICITORS
Squire Patton Boggs
Level 21, 300 Murray Street
Perth, Western Australia 6000, Australia
Accuro Maxwell
Level 26, 56 Pitt Street
Sydney, New South Wales 2000, Australia
SECURITIES EXCHANGES
Australian Securities Exchange
Level 40, Central Park
152-158 St Georges Terrace
Perth, Western Australia 6000
Australia
ASX Code: VMT
Vmoto Limited is a public company incorporated
in Western Australia and listed on the Australian
Securities Exchange.
COMPANY SECRETARY
Ms Shannon Coates
PRINCIPAL AND REGISTERED OFFICE
Suite 5, 62 Ord Street
West Perth, Western Australia 6005, Australia
Telephone: +61 8 9226 3865
Facsimile: +61 8 9322 5230
SHARE REGISTRY
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace
Perth, Western Australia 6000, Australia
Telephone: +61 8 9323 2000
Facsimile: +61 8 9323 2033
WEBSITE AND EMAIL
Website: www.vmoto.com
Email: info@vmoto.com
AUDITOR
Hall Chadwick WA Audit Pty Ltd
283 Rokeby Road,
Subiaco, Western Australia 6008
Australia
2
ANNUAL REPORT 2021 CONTENTS
2
4
6
CORPORATE DIRECTORY
MANAGING DIRECTOR’S LETTER
OPERATIONS REVIEW
10
DIRECTORS’ REPORT
20
REMUNERATION REPORT
30
FINANCIAL STATEMENTS
75
DIRECTORS’ DECLARATION
76
77
82
AUDITOR’S INDEPENDENCE
DECLARATION
INDEPENDENT AUDITOR’S
REPORT
ADDITIONAL SHAREHOLDER
INFORMATION
3
MANAGING DIRECTOR’S
LETTER
DEAR SHAREHOLDERS,
It is with great pleasure and a strong sense of pride
that I again find myself writing to you, our most loyal
shareholders, presenting the Company’s Annual
Report and results for 2021, a year to remember for
many reasons.
Firstly, as most of you will already know, the Company
delivered exceptional results in FY2021, including the
following highlights:
• Record revenue of $86.2 million;
• Record net profit after tax of $8.0 million;
• Record earnings before interest, tax, depreciation
and amortisation of $10.2 million;
• Positive cash flows from operating activities of $3.8
million; and
• Closing cash position of $18.6 million as at 31
December 2021.
Despite the ongoing global COVID-19 pandemic and
its associated disruptions, the Company continued
to enjoy excellent growth across its various business
units, which ultimately delivered record results as
highlighted above. The decision back in 2009 to
produce a product line of all electric mopeds and
motorcycles, that emit “zero emissions”, is proving
itself a defining moment in the Company’s history.
As the world commits to net zero carbon emissions
by 2050, the electrification of the transport industry
finds itself front and centre in that pursuit. As a
consequence, Vmoto’s ability to produce quality
and affordable all electric mopeds and motorcycles
continue to underpin the Company’s growth, serving
B2C and B2B markets that are continuing on their
meteoric rise across the globe.
In support of its strategy of being an early mover in
the electrification of the micro mobility industry in
the form of electric mopeds and motorcycles, Vmoto
established a solid foundation for growth in the form
of its own manufacturing capability in Nanjing China,
comprising over 30,000 square metres of land and
buildings. Again, this decision taken back in 2007, is
proving critical in enabling Vmoto to enjoy its current
4
success. Furthermore, it has solidified our ability to
remain cost competitive on a global scale, with the
capacity to continue to grow.
The Company remains focussed on both the B2C
and B2B markets, in particular those represented
by last mile delivery business models, both of which
show no signs of slowing, but rather continue to
grow exponentially. COVID-19 certainly resulted
in a substantial increase in the market for food
delivery vehicles in particular, and we see this market
continuing to rapidly adopt the use of electric modes
of transport, providing strong growth opportunities
for the Company.
During FY21 we were proud to develop and launch
new proprietary electric vehicle models under the
“Vmoto” brand name. We also continued to pursue
some of the largest global markets which currently
remain untapped from Vmoto’s perspective, including
USA, India and Indonesia. Importantly, these markets
offer incredible sales potential and we are confident
that some of the high-level discussions currently
underway will convert to meaningful sales in those
markets. In addition, we are ramping up our efforts
in strengthening the marketing and branding of the
Company, punctuated by the refreshing of the Vmoto
brand and logo.
Looking forward to FY22, the Company once again
remains on track to deliver in terms of growth, sales
and profitability. In the absence of any unforeseen
circumstances the future for Vmoto remains a bright
one.
Lastly, on behalf of the Vmoto Board and
Management team, I wish to thank all of our loyal
shareholders for their unwavering support and very
much look forward to leading the Company on its
continued path of success.
Yours faithfully,
CHARLES CHEN
MANAGING DIRECTOR
ANNUAL REPORT 2021
5
OPERATIONS OVERVIEW
HIGHLIGHTS
FINANCIAL OVERVIEW FOR FY21
• Statutory results:
×
×
×
Total revenue of $86.2 million, up 41% on
FY20
Net profit after tax (NPAT) of $8.0 million,
up 120% on FY20
Earnings before interest, tax, depreciation
and amortisation (EBITDA) of $10.2 million,
up 76% on FY20
×
Strong positive cash flows from operating
activities of $3.8 million
• Strong cash position of $18.6 million as at 31
December 2021, up 24% from $15 million as at
31 December 2020
• No bank debt as at 31 December 2021
• Net tangible assets of $46.0 million at 31
December 2021, up 39% on FY20
OPERATIONAL HIGHLIGHTS AND KEY
PERFORMANCE INDICATORS FOR FY21
• Total sales of 31,275 units of electric
motorcycles/mopeds, delivered for FY21, up
33% on FY20 and up 57% on FY19.
• Total international sales of 29,945 units,
delivered for FY21, up 36% on FY20 and up
64% on FY19.
• Firm international orders of 12,488 units as at
31 December 2021, up 84% from 6,798 units at
31 December 2020.
• 21 international distributorships established
in FY21, taking the total to 61, and continuing
discussions with a significant number of
additional potential customers in new markets.
6
• Vmoto expanded its partnership with Helbiz
(NASDAQ: HLBZ), an intra-urban transportation
company headquartered in New York, USA,
and will supply 2,000 additional electric
mopeds to Helbiz for deployment in the Italian
market.
• Repeat orders from the Company’s existing
B2B customers highlights the large growth
opportunity represented by international B2B
business - additional orders are expected for
FY22 and beyond.
• Vmoto signed a multi-year sponsorship and
marketing agreement to supply electric
mopeds and exhibit its brands at the world
class electric motorcycle racing event, FIM
ENEL MotoE World Cup (“MotoE”), which is
part of MotoGP.
• The Company launched its new “VMOTO”
premium brand, focussed on supplying high
quality products to international markets.
• The Company launched a number of new
products including new TS, new TC, CUmini,
VS2, VS3, Stash and Concept F01, which
complement the Company’s existing product
range and target a wider group of B2C and
B2B customers and consumers.
FY21 – CONTINUED STRONG OPERATIONAL AND
COMMERCIAL GROWTH FOR VMOTO
During FY21, Vmoto continued to deliver
exceptionally strong sales and revenue growth,
resulting in a record NPAT of circa $8.0 million.
Vmoto continues to deliver and in the process,
affirm its global capability and credibility to
produce quality products and brands in the
electric motorcycle/moped industry, gaining more
recognition and traction from both existing and new
distributors and customers.
ANNUAL REPORT 2021 The Company is dedicated to supplying high
performance and value for money zero emission
electric motorcycles/mopeds into international
markets and continues to expand both its B2B
business and B2C distribution network worldwide.
Despite the significant global economic challenges
as a result of the COVID-19 pandemic in FY21,
the Company sold a total of 31,275 units of zero
emission electric motorcycles/mopeds representing
an increase of 41% on the previous financial year,
translating to total revenue of $86.2 million, both
records performances in Vmoto’s history.
INTERNATIONAL MARKETS
During FY21, the Company signed and renewed
distribution agreements with 21 international
distributors across Ecuador, Peru, French Polynesia,
Israel, Vietnam, Georgia, Indonesia, Mauritius,
Bolivia, Czech Republic, Brazil, Cayman Islands,
Azerbaijan, Guatemala, El Salvador, Honduras,
Nicaragua, Hong Kong, Malaysia, Iceland and
Mexico, for the warehousing, distribution and
marketing of its B2C range of electric motorcycles/
mopeds.
Vmoto now has a total of 61 international
distributors across the world.
Vmoto has also supplied samples to and/or is in
discussions with a number of potential B2C and
B2B distributors and customers in Austria, Australia,
Belgium, Brazil, France, India, Greece, Paraguay,
Portugal, Saudi Arabia, Singapore, Slovenia, South
Africa, Spain, Sweden, Switzerland, Thailand, Turkey,
United Arab Emirates, United Kingdom and United
States.
The Company continues to receive significant
interest in Vmoto’s B2B fleet products from
business operators, which the Company is actively
pursuing.
ORDER BOOK
As at 31 December 2021, the Company had firm
international orders for 12,488 units.
Repeat orders from the Company’s existing B2C
and B2B customers highlights the large growth
opportunity represented by international markets
- additional orders are expected for FY2022 and
beyond.
7
VMOTO DRIVES EUROPEAN SALES WITH MOTOE
AGREEMENT
Vmoto signed a sponsorship and marketing
agreement to supply electric mopeds and exhibit
its brands at the world class electric motorcycle
racing event, FIM ENEL MotoE World Cup (“MotoE”)
for the 2021-2023 seasons. MotoE, part of MotoGP,
is a world class motorcycle racing event that uses
only electric motorcycles.
The sponsorship has provided Vmoto with
significant exposure to potential B2C and B2B
customers and has significantly enhanced Vmoto’s
brand recognition and standing to be alongside a
number of the world’s most prestigious brands and
companies.
NEW “VMOTO” PREMIUM BRAND
As part of Vmoto’s global expansion strategy, the
Company has launched its new “VMOTO” premium
brand, with the aim of supplying a high quality and
competitively priced range of zero emission electric
motorcycles and mopeds to international markets.
The new “VMOTO” premium brand is proprietary
and representative of the Company’s strategic,
global expansion plans.
The Company’s vision for the new brand is to
create a feeling of excitement and joy for riders of
Vmoto’s zero emission electric motorcycles and
mopeds. The Company’s mission is to remain at
the forefront of the ever expanding, zero emission
electric motorcycle & moped sectors globally
through uncompromising quality, customer service
and innovation.
NEW PRODUCTS
During FY21, the Company launched a number
of new products including the new TS, new TC,
CUmini, VS2, VS3, Stash and Concept F01, which
have received significant interest and attention from
distributors, customers and press/media.
This is part of the Company’s strategy to continue
extending its product range to widen its reach and
appeal to a broader spectrum of the market for
electric vehicle users which includes developing
new products. The Company is also collaborating
with renowned global brands to incorporate their
existing products and technologies into Vmoto’s
electric motorcycles/mopeds and distribution
network.
8
ANNUAL REPORT 2021 OUTLOOK
In summary, FY21 has been a successful and
profitable year for the Company, and in the absence
of any material unforeseen events, the Board is
anticipating continued and similar success in FY22.
Vmoto continues to execute on its strategy of
selling high performance and value for money
electric motorcycles/mopeds into international
markets and expanding both its B2B businesses and
B2C distribution network worldwide.
The Company also continues to focus on extending
its product range to widen its reach and appeal to a
broader spectrum of the market for electric vehicle
users. This includes developing new products
and collaborating with renowned brands and
companies to incorporate their existing products
and technologies into Vmoto’s electric motorcycles/
mopeds and distribution network.
The Company’s recently launched “VMOTO”
premium brand provides an important platform
to further promote Company growth while
simultaneously consolidating the Company’s already
strong market position. Following the successful
launch, the Company will now focus on promoting
the VMOTO and Super Soco product series to B2C
distribution and B2B fleet operations distributors
and customers.
The global focus on mitigating the impacts of
climate change and the transition towards electric
vehicles, combined with Vmoto’s market leading
position, provides a strong platform from which
to accelerate growth opportunities. The Company
continues to broaden its commercialisation strategy
and is confident it will be able to continue delivering
strong sales and revenue growth for FY22 and
beyond.
The Company’s vision is to create a feeling of
excitement and joy for riders of Vmoto’s zero
emission electric motorcycles and mopeds, to
mitigate the risks of climate change and to preserve
the environment for future generations.
9
DIRECTORS’ REPORT
The Directors present their report together with the
consolidated financial statements of Vmoto Limited
(“Vmoto” or the “Company”) and its controlled
entities (the “Group”) for the financial period 1
January 2021 to 31 December 2021.
The Directors of the Company at any time during or
since the end of the financial year are set out below.
Directors were in office for the entire year unless
otherwise stated:
EXECUTIVE DIRECTORS
CHARLES CHEN
MANAGING DIRECTOR
Experience and responsibilities:
Mr Chen is an entrepreneur in motorcycle industry
and has previously founded Freedomotor
Corporation Limited in 2004, which were
subsequently acquired by Vmoto through a
management buyout of key assets. Mr Chen holds
a Bachelor of Automobile Engineering from Wuhan
University of Automobile Technology (China) and a
postgraduate Diploma of Business Administration
from South Wales University (UK).
Mr Chens began his career with Hainan Sundiro
Motorcycle Co, Ltd, the largest publicly listed
industrial company in Hainan Province, which was
acquired by Honda Japan in 2001. Mr Chen has
held senior executive roles with Hainan Sundiro
from 1993 to 2002, and professionally trained in
broad aspect of the motorcycle manufacturing
and distribution operations including international
sales and marketing, research and development,
procurement and production.
Mr Chen resides in China, and oversees all of the
Company’s operations and activities.
10
IVAN TEO
FINANCE DIRECTOR
Experience and responsibilities:
Mr Teo joined the Company as Chief Financial
Officer since 17 June 2009 and has been a Finance
Director of the Company since 29 January 2013.
Mr Teo is an experienced finance executive with
significant experience in international business.
Mr Teo is a qualified Chartered Accountant and has
over 18 years of finance and accounting experience
with private and public companies in a diverse range
of industries including automobile, manufacturing,
mining and retail.
Mr Teo graduated from University of Adelaide,
South Australia with a Bachelor of Commerce and
currently resides in China.
ANNUAL REPORT 2021 11
NON-EXECUTIVE DIRECTORS
BLAIR SERGEANT
INDEPENDENT
NON-EXECUTIVE DIRECTOR
Experience and responsibilities:
Mr Sergeant has been a Non-Executive Director of
the Company since 4 November 2020.
Mr Sergeant is an experienced public company
executive, having been the former Founding
Managing Director of Lemur Resources Limited, as
well as the former Finance Director of Coal of Africa
Limited, which the company grew from a sub-$2m
market capitalisation to over $1.5b at its peak. Mr
Sergeant was also responsible for the acquisition of
Vmoto in mid-2006, resulting in reverse takeover
of Optima Corporation Limited. Furthermore, Mr
Sergeant was responsible for the acquisition of
Freedomotor Ltd by Vmoto Limited in early 2007.
During his career, Mr Sergeant has held the position
of Managing Director, Non- Executive Director and/
or Company Secretary for numerous listed entities
across a broad spectrum of industry. Mr Sergeant
graduated from Curtin University, Western Australia
with a Bachelor of Business and subsequently, a
Post Graduate Diploma in Corporate Administration.
He is a Chartered Secretary, member of the
Governance Institute of Australia, member of the
Australian Institute of Company Directors and an
Associate of the Australian Certified Practising
Accountants.
SHANNON COATES
INDEPENDENT
NON-EXECUTIVE DIRECTOR
Experience and responsibilities:
Ms Coates has been a Non-Executive Director of
the Company since 23 May 2014.
Ms Coates completed a Bachelor of Laws through
Murdoch University and has since gained over 20
years’ in-house experience in corporate law and
compliance for public companies. She is a Chartered
Secretary and an Associate Member of both the
Institute of Chartered Secretaries & Administrators
and Governance Institute Australia. She is also a
graduate of the Australian Institute of Company
Directors.
12
Ms Coates is a director of Evolution Corporate
Services Pty Ltd, a company providing corporate
advisory services and is also company secretary to
a number of listed companies.
Currently, Mr Chen is vice president of Changzhou
Supaiqi E-Vehicle Co, Ltd, which is one of the most
renowned electric vehicle manufacturers in China at
present.
KAIJIAN CHEN
INDEPENDENT
NON-EXECUTIVE DIRECTOR
Experience and responsibilities:
Mr Chen has been a Non-Executive Director of the
Company since 1 September 2011.
Mr Chen has extensive experience in the motorcycle
manufacturing industry in China. He was formerly
vice president of Hainan Sundiro Motorcycle Co,
Ltd, which was the second largest motorcycle
manufacturer in China at the time, and which was
subsequently acquired by Honda in 2001.
Mr Chen also served as vice president for Xinri
E-Vehicle Co. Ltd, which is one of the largest electric
two-wheel vehicle manufacturers in China at present
and the first electric two-wheel vehicle enterprise in
China that listed on securities exchange.
Mr Chen holds a degree from the Beijing Institute of
Technology and resides in China.
COMPANY SECRETARY
SHANNON COATES
Experience and responsibilities:
Ms Coates has been the Company Secretary of the
Company since 10 May 2007.
A summary of Ms Coates’ qualifications and
experience appears above. A sum
13
DIRECTORSHIPS IN OTHER LISTED ENTITIES
Directorships in other listed entities held by Directors of the Company during the last 3 years immediately
before 31 December 2021 are as follows:
DIRECTOR
COMPANY
FROM
Mr Charles Chen
Mr Ivan Teo
Mr Blair Sergeant
-
-
Bowen Coking Coal
Limited
Rincon Resources
Limited
-
-
2018
2020
Ikwezi Mining Limited
2020
Celsius Resources
Limited
2021
Ms Shannon Coates
Bellevue Gold Ltd
2020
Flinders Mines Limited
2018
Kopore Metals Limited
2015
Mr Kaijian Chen
-
-
TO
-
-
2021
Current
2021
2021
Current
2019
2021
-
DIRECTORS’ MEETINGS
PRINCIPAL ACTIVITY
The number of Directors’ meetings and the number
of meetings attended by each of the Directors of
the Company during the year ended 31 December
2021 are:
The principal activity of the Group during the year
ended 31 December 2021 was the development and
manufacture, marketing and distribution of electric
two-wheel vehicle (electric motorcycles and electric
mopeds).
BOARD MEETINGS
OPERATING AND FINANCIAL REVIEW
DIRECTOR
HELD WHILE
DIRECTOR
ATTENDED
REVIEW OF OPERATIONS
Mr Charles Chen
Mr Ivan Teo
Mr Blair Sergeant
Ms Shannon Coates
Mr Kaijian Chen
3
3
3
3
3
3
3
3
3
3
There is presently no separate Audit, Nomination
or Remuneration Committee, with all committee
functions being addressed by the full Board.
14
Vmoto Limited is a global electric two-wheel
vehicle (EV) manufacturing and distribution group.
The Company specialises in high quality electric
two-wheel vehicle and manufactures a range of
high-end electric two-wheel vehicle from its own
manufacturing facilities in Nanjing, China. Vmoto
combines comprehensive and well-established
Chinese manufacturing capabilities and supply
chain with international design. The Group operates
through the following primary brands:
• E-Max, its own proprietary brand, targeting
international B2B markets;
• Super Soco, a B2C brand for which Vmoto
holds international marketing rights outside of
China; and
• Vmoto, its own proprietary brand, targeting
international premium B2C and B2B markets.
ANNUAL REPORT 2021 Total consolidated sales of $86.2 million were recorded for the Group for the year ended 31 December
2021 (FY2020: $61 million). The revenue of the Group has increased 41% compared to the year ended 31
December 2020, largely due to increased international sales into the electric two-wheel vehicle market
as the Company capitalised on new government policies and regulation in Europe supporting sustainable
personal electric mobility and the growth of businesses using electric vehicles in their delivery and
ride-sharing operations. During the year ended 31 December 2021, the Group recorded a net profit of
$8,034,030 after income tax (FY2020: $3,655,860). The earnings before interest, tax, depreciation and
amortisation (EBITDA) for the year ended 31 December 2021 was $10,225,753 (FY2020: $5,806,014).
The following table provides a reconciliation between the EBITDA and statutory net profit after tax for the
year ended 31 December 2021 and 31 December 2020:
Earnings before interest, tax, depreciation and
amortisation
Depreciation and amortisation
Profit before interest and tax
Interest income
Interest expense
Income tax expense
FY2021
FY2020
$10,225,753
$5,806,014
($1,643,173)
$8,582,580
$189,705
($23,101)
($1,594,082)
$4,211,932
$124,510
($116,070)
($715,154)
($564,512)
NET PROFIT AFTER TAX
$8,034,030
$3,655,860
Directors believe this information is useful to provide investors with transparency on the underlying
performance of the Company.
A more detailed review of operations for the year ended 31 December 2021 is set out in the Operations
Review preceding the Directors’ Report.
REVIEW OF FINANCIAL POSITION
The Group’s net assets increased by approximately
$12.9 million to $46 million during the year ended 31
December 2021.
Cash balances increased by approximately $3.6
million during the year ended 31 December 2021
due to increased sales and orders from customers.
During the year, the Group has continued to receive
significant deposits and funds from its existing
and new customers for growing orders and to
invest further into working capital for the Group’s
expanding international distribution operations
especially in Europe, with an aim to continue to
penetrate further into international markets and
further consolidate the Group’s position as leading
electric two-wheel vehicle company in the world.
The Company launched its new “VMOTO” premium
brand and to continuously design and develop new
premium products, aiming to supply high quality
products to international markets.
Trade and other receivables increased by $6.1
million, largely due to growing orders from the
customers, flexible payment terms to the Group’s
long term strategic customers with high credibility
and increased in credits from governments as a
result of increased sales activities. The Group’s long
term strategic customers have paid all their trade
receivables due in full on time post 31 December
2021.
Inventories increased by $8 million and
prepayments increased by approximately $3.4
million, which reflect the significant increase in
15
orders from customers. This represents increase
in inventories level to ensure products ordered by
customers are delivered on time in full in the most
efficient manner post 31 December 2021.
The potential material business risks faced by the
Company that are likely to have an effect on the
financial prospects of the Company and how the
Company manages these risks include:
• Competition in the electric two-wheel vehicles
industry – Vmoto operates in the electric
two-wheel vehicle industry and the Company
expects additional competitors to enter
this market that may have greater financial,
research and development, marketing,
distribution and other resources. We believe
that we can compete in this market very
competitively as Vmoto has the first mover
advantage having operated in the electric
two-wheel vehicle markets since 2009, Vmoto
manufactures its products in China that has
comprehensive and long history of supply
chain for electric two-wheel vehicles and
Vmoto has established a distribution network
over 60 countries in the world.
• Technological obsolescence – given the
Company operates in an industry involving
electric vehicle technology, any technological
obsolescence could have an impact on
our financial results. We address this risk
through continued investment in research
and development, patent appropriate and
necessary research and development results,
recruitment of competent technicians and
constantly monitoring the market. We see this
risk as minimal as the Company is constantly
developing new technology and functions in
its electric two-wheel vehicle products and has
the protection of trademarks and patents.
• Business relationship with Super Soco –
Vmoto signed a joint investment agreement
with Super Soco in February 2020, to
establish a jointly owned Chinese registered
manufacturing company, Nanjing Vmoto Soco
Intelligent Technology Co, Ltd (Vmoto Soco
Manufacturing). Vmoto and Super Soco each
own 50% of the issued capital of Vmoto Soco
Manufacturing. The joint investment agreement
reduced the risk however changes in business
cooperation and circumstances of Super Soco
could have an impact on our financial results.
Trade and other payables increased by
approximately $9.3 million during the period
primarily due to significant increase in deposits from
customers for more orders, which are unearned
until the products are delivered to customers.
Issued capital increased by $0.7 million during the
year ended 31 December 2021, primarily due to
vesting of share based expenses in relation to its
directors and employees.
No dividend has been declared or paid by the
Company to the date of this Annual Report in
respect of the year ended 31 December 2021.
BUSINESS STRATEGIES AND PROSPECTS FOR
FUTURE FINANCIAL YEARS
The Company’s business strategies for future
financial years include:
• Continue to focus on high value and high
margin international markets and to become
worldwide leading electric vehicle manufacturer
and provider to B2C and B2B customers and
markets internationally;
• Continue to improve the Company’s electric
two-wheel vehicle products to attract high
quality international business group customers;
• Expand the Company’s product range
including electric three-wheel vehicle to
supply to broad spectrum of consumers and
customers;
• Expand its European distribution network and
warehouse in Europe to accelerate sales into
European B2C and B2B markets;
• Expand its international distribution network
including North America and Asia, and to work
with strategic distributors/customers to target
large projects in their local markets; and
• Expand its international B2B business and
target large B2B customers in ride-sharing and
delivery sectors.
16
ANNUAL REPORT 2021 IMPACT OF LEGISLATION AND OTHER EXTERNAL
REQUIREMENTS
The Group’s operations are not subject to any
significant environmental regulations. The Board
believes that the Group has adequate systems in
place for the management of its environmental
regulations and is not aware of any breach of those
environmental requirements as they apply to the
Group.
CLEAN ENERGY LEGISLATIVE PACKAGE
The Clean Energy Legislative Package, which
included the Clean Energy Act 2011, was passed by
the Australian Government in November 2011. It sets
out the way that the government will introduce a
carbon price to reduce Australia’s carbon pollution
and move to a clean energy future.
The Group’s manufacturing activities are primarily
carried out in China and the Directors believe that
the Group will not be significantly affected by this
legislation passed. The Group has not incorporated
the effect of any carbon price implementation in its
impairment testing at 31 December 2021.
The Directors’ view is that there were no changes
in environmental or other legislative requirements
during the year that have significantly affected the
results or operations of the Group.
EVENTS SUBSEQUENT TO BALANCE DATE
There has not arisen in the interval between the
end of the financial period and the date of this
Annual Report any item, transaction or event of a
material and unusual nature likely, in the opinion of
the Directors, to affect significantly the operations
of the Group, the results of those operations, or the
state of affairs of the Group in future financial years.
LIKELY DEVELOPMENTS
Further information about likely developments in the
operations of the Group and the expected results
of those operations in future financial years are
discussed in the Operations Review.
DIRECTORS’ INTERESTS
The relevant interests of each Director in the shares,
options and rights issued by the Company at the
date of this Annual Report are as follows:
DIRECTOR
ORDINARY SHARES
OPTIONS
SERVICE &
PERFORMANCE RIGHTS
Mr Charles Chen1
23,087,784
Mr Ivan Teo2
1,621,207
Mr Blair Sergeant3
90,000
Ms Shannon Coates4
437,929
Mr Kaijian Chen5
3,002,427
-
-
-
-
-
4,771,703
1,985,586
-
-
-
1. 23,087,784 shares and 4,771,703 service and performance rights are held directly by Mr Charles Chen.
2. 1,621,207 shares and 1,985,586 service and performance rights are held directly by Mr Ivan Teo.
3. 90,000 shares are held indirectly by Rio Super Pty Ltd as trustee for Rio Grande Do Norte Super Fund.
Mr Sergeant is a beneficiary of Rio Grande Do Norte Super Fund.
4. 437,929 shares are held indirectly by Ms Coates’ spouse, Mr Simon Kimberley Coates as trustee for the
Kooyong Trust. Ms Coates is a beneficiary of the Kooyong Trust.
5. 3,002,427 shares are held directly by Mr Kaijian Chen.
17
OPTIONS
At the date of this Annual Report, there are no
options over unissued ordinary shares of the
Company.
SERVICE & PERFORMANCE RIGHTS
On 17 May 2021, the Company issued 1,320,708
performance rights to Mr Charles Chen and 549,464
performance rights to Mr Ivan Teo as approved by
shareholders on 13 May 2021.
INDEMNIFICATION AND INSURANCE OF
OFFICERS AND AUDITORS
INDEMNIFICATION
The Company has agreed to indemnify the current
Directors and Officers of the Company against
all liabilities to another person (other than the
Company or a related body corporate) that may
arise from their position as Directors and Officers of
the Company, except where the liability arises out of
conduct involving a lack of good faith.
On 20 December 2021, the Company issued
600,000 shares to Mr Charles Chen and 250,000
shares to Mr Ivan Teo as a result of vesting of
850,000 service rights.
The agreement stipulates that the Company will
meet, to the maximum extent permitted by law, the
full amount of any such liabilities, including costs and
expenses.
All Performance Rights convert to fully paid
ordinary shares for nil cash consideration, subject to
performance based vesting conditions. At the date
of this report, rights over unissued ordinary shares
of the Company are:
The Company has not agreed to indemnify their
current auditors, Hall Chadwick WA Audit Pty Ltd.
INSURANCE PREMIUMS
CLASS
2020 Service Rights
NUMBER
850,000
2020 Performance rights
4,037,117
2021 Performance rights
1,870,172
As at the date of this Annual Report, a Directors
and Officers insurance policy has been secured. The
insurance premium for this policy paid during the
year ended 31 December 2021 was $58,998.
Non-audit services
During the year, Hall Chadwick WA Audit Pty Ltd,
the Company’s auditor, did not perform any non-
audit services in addition to their statutory duties.
Auditor’s Independence Declaration
The Auditor’s Independence Declaration is set out
on page 76 and forms part of the Directors’ Report
for the year ended 31 December 2021.
18
ANNUAL REPORT 2021 19
REMUNERATION REPORT
This remuneration report outlines the Director
and executive remuneration arrangements of the
Company and the Group.
The Board as a whole is responsible for considering
remuneration policies and packages applicable both
to Directors and executives of the Company and
the Group.
Key Management Personnel have authority and
responsibility for planning, directing and controlling
the activities of the Company and the Group,
including Directors of the Company and other
executives. Key Management Personnel comprise
the Directors of the Company, key management
and executives for the Company and the Group.
DIRECTOR AND KEY MANAGEMENT PERSONNEL
DETAILS
The following persons acted as Directors of the
Company during or since the end of the financial
year:
• Mr Charles Chen
• Mr Ivan Teo
• Mr Blair Sergeant
• Ms Shannon Coates
• Mr Kaijian Chen
The term ‘Key Management Personnel’ is used in
this remuneration report to refer to the Directors
and the following persons. Except as noted, the
named persons held their position during or since
the end of the financial year:
• Mr Jeffrey Wu (Sales Manager)
• Mr Gaetan Orselli (Sales Manager)
• Mr Maik Spaan (Europe After Sales & Service
Manager)
• Ms Susan Xie (Sales Manager)
• Mr Adam Cui (Sales Manager)
20
OVERVIEW OF REMUNERATION POLICIES
Broadly, remuneration levels for Key Management
Personnel of the Company and Key Management
Personnel of the Group are competitively set
to attract and retain appropriately qualified
and experienced Directors and executives and
reward the achievement of strategic objectives.
The Board may seek independent advice on the
appropriateness of remuneration packages of
both the Company and the Group given trends
in comparative companies both locally and
internationally, and the objectives of the Company’s
remuneration strategy.
Remuneration packages consist of fixed
remuneration including base salary, employer
contributions to superannuation funds and non-cash
benefits.
The Company has established a long-term incentive
plan, which is known as the Vmoto Limited
Employee Long Term Incentive Plan. This plan
allows Directors to offer equity securities to attract,
motivate and retain key directors, employees and
consultants and provide them with the opportunity
to participate in the future growth of the Company.
Under the plan, the Board may offer to eligible
persons the opportunity to subscribe for equity
securities in the Company as the Board may decide
and, on the terms, set out in the rules of the plan.
FIXED REMUNERATION
Fixed remuneration consists of base remuneration
(which is calculated on a total cost basis and
includes any FBT charges related to employee
benefits including motor vehicle), as well as
employer contributions to superannuation funds.
Remuneration levels are reviewed annually by the
Board through a process that considers individual,
segment and overall performance of the Group. The
Board has regard to remuneration levels external to
the Group to ensure the Directors’ and executives’
remuneration is competitive in the market place.
ANNUAL REPORT 2021 Executive Directors are employed full time and
receive fixed remuneration in the form of salary
and statutory superannuation or consultancy fees,
commensurate with their required level of services.
Non-Executive Directors receive a fixed monthly fee
for their services. Where Non-Executive Directors
provide services materially outside their usual Board
duties, they are remunerated on an agreed retainer
or daily rate basis.
NON-EXECUTIVE DIRECTORS
Total remuneration for all Non-Executive Directors,
last voted upon by shareholders at the 2012 Annual
General Meeting, is not to exceed A$300,000 per
annum and has been set at a level to enable the
Company to attract and retain suitably qualified
Directors. The Company does not have any
scheme relating to retirement benefits for Non-
Executive Directors.
SERVICE AGREEMENTS
It is the Group’s policy that service agreements for
Key Management Personnel are unlimited in term
but capable of termination on 3 months’ notice
and that the Group retains the right to terminate
the service agreements immediately, by making
payment equal to 3 months’ pay in lieu of notice.
The service agreement outlines the components of
compensation paid to Key Management Personnel
but does not prescribe how remuneration levels
are modified year to year. Remuneration levels are
reviewed annually on a date as close as possible to
31 December of each year to take into account Key
Management Personnel’s performance. Certain Key
Management Personnel will be entitled to bonuses
as the Board may decide in its absolute discretion
from time to time.
RELATIONSHIP BETWEEN THE REMUNERATION
POLICY AND COMPANY PERFORMANCE
The remuneration policy has been tailored to
increase goal congruence between shareholders,
Directors and executives. Two methods have
been applied to achieve this aim, the first being a
performance-based rights subject to performance-
based vesting conditions, and the second being
the issue of options or shares to Key Management
Personnel to encourage the alignment of personal
and shareholder interests.
The tables below set out summary information
about the Group’s earnings and movements in
shareholder wealth for the last five reporting
years:
In AUD
In AUD
Revenue
Net profit / (loss)
before tax
Net profit / (loss)
after tax
In AUD
31 Dec 2021
12 months
31 Dec 2020
12 months
31 Dec 2019
12 months
31 Dec 2018
12 months
31 Dec 2017
12 months
$’000
86,167
8,749
8,034
$’000
61,013
4,220
3,656
$’000
45,672
1,301
1,301
$’000
19,578
(918)
(918)
$’000
15,079
(8,097)
(8,097)
31 Dec 2021
12 months
31 Dec 2020
12 months
31 Dec 2019
12 months
31 Dec 2018
12 months
31 Dec 2017
12 months
Share price at start
of period
$0.44
Share price at end
of period
$0.43
$0.245
$0.056
$0.058
$0.099
$0.44
$0.245
$0.056
$0.058
Dividend
-
-
-
-
-
Basic earnings/
(loss) per share
Diluted earnings/
(loss) per share
2.89 cents
1.45 cents
0.58 cents
(0.43 cents)
(4.68 cents)
2.82 cents
1.45 cents
0.57 cents
(0.43 cents)
(4.68 cents)
21
DIRECTORS’ AND EXECUTIVE OFFICERS’ REMUNERATION
Details of the nature and amount of each major element of the remuneration of each Director of the
Company and the named officers of the Company and the Group for the years ended 31 December 2021
and 31 December 2020 are:
SHORT-TERM
POST
EMPLOY-
MENT
SHARE
BASED
Salary &
fees
STI cash
bonus
Superan-
nuation
benefits
Shares
Total
Propor-
tion of
remu-
neration
shares
related
Propor-
tion of
remu-
neration
perfor-
mance
related
In AUD
$
$
$
$
$
$
$
EXECUTIVE DIRECTORS
Mr
Charles
Chen
Mr Ivan
Teo
12 months to
Dec 2021
12 months to
Dec 2020
12 months to
Dec 2021
12 months to
Dec 2020
390,8331
350,000
185,5212
152,500
NON-EXECUTIVE DIRECTORS
12 months to
Dec 2021
12 months to
Dec 2020
12 months to
Dec 2021
12 months to
Dec 2020
12 months to
Dec 2021
12 months to
Dec 2020
12 months to
Dec 2021
12 months to
Dec 2020
12 months to
Dec 2021
12 months to
Dec 2020
Mr Blair
Sergeant3
Ms
Shannon
Coates4
Mr Kaijian
Chen5
Mr Phillip
Campbell
(resigned
4 Nov
2020)
Total, all
Directors
22
120,000
10,000
54,795
45,662
-
-
-
55,000
751,149
613,162
-
-
-
-
-
-
-
-
-
-
-
-
-
5,205
4,338
-
-
-
-
870,745
1,261,578
69%
44%
465,102
815,102
57%
2%
362,461
547,982
66%
42%
193,780
346,280
56%
2%
-
-
-
-
120,000
10,000
60,000
50,000
-
-
-
-
42,603
42,603
100%
82,424
82,424
100%
-
-
-
128,795
183,795
70%
-
-
-
-
-
-
-
-
5,205
63%
39%
4,338
870,101
58%
2%
ANNUAL REPORT 2021 1. Mr Chen’s Director fees for the year ended 31 December 2021 was USD312,667.
2. Mr Teo’s Director fees for the year ended 31 December 2021 was USD148,417.
3. Mr Sergeant was appointed as Non-executive Director on 4 November 2020.
4. Ms Coates was appointed as Non-Executive Director on 23 May 2014. Ms Coates was appointed
Company Secretary to the Company in 2007 and, via an associated company Evolution Corporate
Services Pty Ltd, provides company secretarial, corporate advisory and Australian registered office
services to Vmoto for a monthly retainer. For the 2021 financial year, the Company paid Evolution
Corporate Services Pty Ltd $72,000 for these services, which is not included in the amount above.
5. Mr Kaijian Chen was appointed as Non-Executive Director on 1 September 2011. Mr Chen has agreed to
receive his Director fees in shares and the Company will seek shareholders’ approval for this issue at
the 2022 Annual General Meeting. Mr Chen’s FY2020 Director fees were also paid in shares.
23
SHORT-TERM
POST-
SHARE
BASED
Salary
& fees
STI
cash
bonus
Super-
annu-
ation
benefits
Shares
Total
Propor-
tion of
remu-
ner-
ation
shares
related
Propor-
tion of
remu-
ner-
ation
perfor-
mance
related
$
$
$
$
$
$
$
In AUD
EXECUTIVES
Mr Jeffrey Wu
(Sales Manager)
Mr Gaetan Orselli
(Sales Manager,
appointed 1 July
2020)
Mr Maik Spaan
(Europe After
Sales & Service
Manager,
appointed 1 Jun
2020)
12 months to
Dec 2021
12 months to
Dec 2020
12 months to
Dec 2021
12 months to
Dec 2020
63,569
29,804
63,519
63,135
131,250
49,552
12 months to
Dec 2021
110,122
12 months to
Dec 2020
63,805
-
-
-
-
Ms Susan Xie
(Sales Manager)
Mr Adam Cui
(Sales Manager)
Mr Marcel Koper
(Europe After
Sales & Service
Director, resigned
31 May 2020)
Total, all
Executives
12 months to
Dec 2021
12 months to
Dec 2020
12 months to
Dec 2021
12 months to
Dec 2020
12 months to
Dec 2021
12 months to
Dec 2020
12 months to
Dec 2021
12 months to
Dec 2020
51,563
32,081
36,802
30,110
51,873
34,151
35,376
5,227
-
116,668
-
-
96,036
365,722 98,472
24
-
-
-
-
-
-
-
-
-
-
-
-
-
-
39,260
132,633
30%
22%
23,488
150,142
16%
42%
-
-
131,250
49,552
-
-
7,944
118,066
7%
-
63,805
-
-
-
-
-
22,934
106,578
22%
30%
14,289
81,201
18%
37%
-
-
-
-
86,024
40,603
-
116,668
-
-
-
-
40%
13%
-
-
70,138
574,551
12%
17%
37,777
501,971
8%
20%
ANNUAL REPORT 2021 SHARE-BASED PAYMENT ARRANGEMENTS
SHARES
There is no further service or performance criteria
that need to be met in relation to options granted
before the beneficial interest vests in the recipient.
On 8 February 2021, 970,000 shares were granted
to Key Management Personnel as an incentive
and to recognise their efforts in the year ended
31 December 2020. The shares granted to Key
Management Personnel are subject to a three-year
voluntary escrow period.
During the year ended 31 December 2021, no
options were granted to Key Management
Personnel under the Plan.
SERVICE & PERFORMANCE RIGHTS
OPTIONS
The Company operates an Employee Long Term
Incentive Plan (Plan) for eligible persons of the
Group. In accordance with the provisions of the
Plan, eligible persons may be granted options to
purchase ordinary shares at an exercise price to be
determined by the Board with regard to the market
value of the shares when it resolves to offer the
options. The options may only be granted to eligible
persons after the Board considers the person’s
seniority, position, length of service, record of
employment, potential contribution and any other
matters which the Board considers relevant.
Each employee share option converts into one
ordinary share of Vmoto Limited on exercise. No
amounts are paid or payable to the Company by
the recipient on receipt of the option. The options
carry neither rights to dividends nor voting rights.
Options may be exercised at any time from the date
of vesting to the date of their expiry.
The number of options granted is determined by
the Board.
As above, the Company operates an Employee
Long Term Incentive Plan for eligible persons of
the Group. In accordance with the provisions of
the Plan, eligible persons may be granted rights
to attract, motivate and retain key directors,
employees and consultants to participate in the
future growth of the Company to be determined by
the Board and on the terms set out in the rules of
the plan. The rights may only be granted to eligible
persons after the Board considers the person’s
seniority, position, length of service, record of
employment, potential contribution and any other
matters which the Board considers relevant.
Each right converts into one ordinary share of
Vmoto Limited at nil consideration when service
and performance-based conditions as determined
by the Board are met within designated period.
No amounts are paid or payable to the Company
by the recipient on receipt of the rights or on
conversion of the rights to shares. Rights carry
neither rights to dividends nor voting rights.
The number of rights granted is determined by the
Board.
Rights under the Plan expire when the applicable
service and/or performance conditions are not met
within designated period, or immediately on the
resignation of the eligible persons, whichever is the
earlier.
Unless specified by the Board at the time of offer of
rights, there are no further service or performance
criteria that need to be met in relation to rights
granted before the beneficial interest vests in the
recipient.
25
PERFORMANCE RIGHTS GRANTED IN FY2021
During the year ended 31 December 2021, 1,320,708 performance rights were granted to Mr Charles Chen
and 549,464 performance rights were granted to Mr Ivan Teo pursuant to the shareholder approval on 13
May 2021.
The performance rights vest subject to:
• Continuing employment
• Minimum performance hurdle of a minimum share price compound annual growth rate (CAGR)
increases of 5% over the performance period
• No performance rights will vest if CAGR is less than 5% over the respective period
• 50% of the performance rights will vest if CAGR of 10% is achieved, up to maximum of 100% of the
performance rights will vest if CAGR of 15% is achieved and pro rata of the performance rights will vest
if CAGR is >5%&<10% and >10%&<15%, as follows:
PERFORMANCE HURDLES
Performance right
grants
Performance
period
Share price
hurdle
25% vest
50% vest
100% vest
2020 performance
rights
2021 performance
rights
2 years to
31 December
2022
3 years to
31 December
2023
5%
5%
5%
5%
10%
15%
10%
15%
FAIR VALUE OF PERFORMANCE RIGHTS GRANTED DURING THE PERIOD
The fair value of services received in return for performance and service rights granted to executive
directors is measured by reference to the fair value of the rights granted. The estimate of the fair value
of the services received is measured by reference to the vesting conditions specific to the grant based
on Black-Scholes valuation methodology for service rights and Monte Carlo valuation methodology for
performance rights.
Assumptions to determine fair value of rights
2021 performance rights
Grant date
Fair value at measurement date
Share price at grant date
Performance rights life
26
13 May 2021
$0.1938
$0.425
3 years
ANNUAL REPORT 2021 SHARE HOLDINGS AND TRANSACTIONS OF KEY MANAGEMENT PERSONNEL
The movement during the year ended 31 December 2021 in the number of ordinary shares held, directly,
indirectly or beneficially by each key management person, including their personally-related entities, is as
follows:
Held at 1
Jan 2021
Held at
date of ap-
pointment
Net
change1
Granted as
remunera-
tion
Received
on vest
of service
rights
Held at
date of
resigna-
tion
Held at 31
Dec 2021
DIRECTORS
Mr C Chen
22,487,784
Mr I Teo
1,371,207
Mr B Sergeant -
Ms S Coates
437,929
Mr K Chen
2,912,539
EXECUTIVES
N/A
N/A
-
N/A
N/A
-
-
90,000
-
-
-
-
-
-
89,888
Mr J Wu
1,050,000
N/A
(150,000)
100,000
Mr G Orselli
Mr M Spaan
-
-
Ms S Xie
650,000
Mr A Cui
-
-
-
N/A
N/A
-
-
-
50,000
(60,000)
50,000
-
-
600,000
250,000
-
-
-
-
-
-
-
-
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
23,087,784
1,621,207
90,000
437,929
3,002,427
1,000,000
-
50,000
640,000
-
1. Net change represents the acquisition and disposal of shares on market and exercise of options by the
Key Management Personnel.
27
OPTION HOLDINGS OF KEY MANAGEMENT PERSONNEL
The movement during the year ended 31 December 2021 in the number of options over ordinary shares
held, directly, indirectly or beneficially by each key management person, including their personally-related
entities, is as follows:
Held at 1
Jan 2021
Held at
date of ap-
pointment
Net
change1
Granted as
remunera-
tion
Received
on vest
of service
rights
Held at
date of
resigna-
tion
Held at 31
Dec 2021
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-
-
-
-
-
-
-
-
-
-
DIRECTORS
Mr C Chen
Mr I Teo
-
-
Mr B Sergeant -
Ms S Coates
Mr K Chen
EXECUTIVES
Mr J Wu
Mr G Orselli
Mr M Spaan
Ms S Xie
Mr A Cui
-
-
-
-
-
-
-
28
ANNUAL REPORT 2021 SERVICE AND PERFORMANCE RIGHTS OF KEY MANAGEMENT PERSONNEL
The movement during the year ended 31 December 2021 in the number of service and performance rights
over ordinary shares held, directly, indirectly or beneficially by each key management person, including their
personally-related entities, is as follows:
Held at 1
Jan 2021
Held at
date of ap-
pointment
Net
change1
Granted as
remunera-
tion
Received
on vest
of service
rights
Held at
date of
resigna-
tion
Held at 31
Dec 2021
DIRECTORS
Mr C Chen
4,050,995
Mr I Teo
1,686,122
Mr B Sergeant -
Ms S Coates
Mr K Chen
EXECUTIVES
Mr J Wu
Mr G Orselli
Mr M Spaan
Ms S Xie
Mr A Cui
-
-
-
-
-
-
-
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-
-
-
-
-
-
-
-
-
-
1,320,708
(600,000)
549,464
(250,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
4,771,703
1,985,586
-
-
-
-
-
-
-
-
OTHER KEY MANAGEMENT PERSONNEL TRANSACTIONS
During the year ended 31 December 2021, Evolution Corporate Services Pty Ltd, an entity associated with
Ms Shannon Coates, provided company secretarial, administration and registered office services to the
Group pursuant to consultancy agreement and received total fees of A$72,000 for the year ended 31
December 2021.
Other than the above, there have been no related party transactions involving any of the Key Management
Personnel identified in the table above during the year or the previous year.
This report is made with a resolution of the Directors pursuant to s298(2) of the Corporations Act 2001:
CHARLES CHEN
MANAGING DIRECTOR
Dated at Western Australia, this 30th day of March 2022.
29
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED
31 DECEMBER 2021
Notes
Year ended
31 December 2021
$
Year ended
31 December 2020
$
Revenue from sale of goods
86,167,219
61,013,045
Cost of sales
Gross Profit
Other income
(62,520,741)
(46,655,366)
23,646,478
14,357,679
2(a)
2,294,341
1,757,431
Operational expenses
(10,917,613)
(7,517,213)
Marketing and distribution expenses
(1,644,402)
(750,607)
Corporate and administrative expenses
(4,577,367)
(3,330,413)
Occupancy expenses
(177,396)
(158,804)
Other expenses
2(b)
(491,927)
-
Share of losses from equity accounted
investments
Finance costs
Profit from continuing operations
before tax
640,171
(23,101)
(21,631)
(116,070)
8,749,184
4,220,372
Income tax expense
4(a)
(715,154)
(564,512)
Profit after tax from continuing
operations
8,034,030
3,655,860
30
ANNUAL REPORT 2021 Notes
Year ended
31 December 2021
$
Year ended
31 December 2020
$
3,179,413
3,179,413
(2,037,580)
(2,037,580)
11,213,443
1,618,280
Other comprehensive income
Foreign currency translation differences
Other comprehensive income for the
year, net of income tax
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR
Profit/(Loss) for the year attributable
to:
Owners of the Company
8,082,465
3,736,956
Non-controlling interests
(48,435)
(81,096)
8,034,030
3,655,860
Total comprehensive income for the
year attributable to:
Owners of the Company
11,261,878
1,699,376
Non-controlling interest
(48,435)
11,213,443
(81,096)
1,618,280
Earnings per share
20
Basic earnings/(loss) per share
2.89 cents
1.45 cents
Diluted earnings/(loss) per share
2.82 cents
1.45 cents
The consolidated statement of profit or loss and other comprehensive income should be read in conjunction
with the accompanying notes.
31
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS
AT 31 DECEMBER 2021
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
Total Current Assets
NON-CURRENT ASSETS
Property, plant and equipment
Right-of-use assets
Intangible Assets
Investments accounted for using equity
method
5
6
7
8
9
13
10
11
18,633,879
14,997,486
14,812,971
8,724,876
12,527,456
4,487,723
3,847,521
437,710
49,821,826
28,647,795
5,988,074
6,496,557
360,509
478,605
-
-
7,132,878
5,943,885
Total Non-Current Assets
13,481,461
12,919,047
TOTAL ASSETS
63,303,287
41,566,842
32
ANNUAL REPORT 2021 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS
AT 31 DECEMBER 2021 (CONTINUED)
CURRENT LIABILITIES
Trade and other payables
Current tax liabilities
Lease liabilities
12
4(e)
13
16,863,435
7,588,206
9,451
110,494
308,254
107,416
Total Current Liabilities
16,983,380
8,003,876
282,768
282,768
402,171
402,171
17,266,149
8,406,047
46,037,138
33,160,795
NON-CURRENT LIABILITIES
Lease liabilities
13
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
Non-controlling interests
14
14
17
15
90,559,203
89,823,509
1,394,952
(2,711,667)
(45,842,953)
(53,925,418)
(74,064)
(25,629)
TOTAL EQUITY
46,037,138
33,160,795
The consolidated statement of financial position is to be read in conjunction with the accompanying notes.
33
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE
YEAR ENDED 31 DECEMBER 2021
Notes
Year ended
31 December 2021
$
Year ended
31 December 2020
$
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Other cash receipts
95,511,785
(92,944,871)
189,705
-
1,038,256
56,278,610
(52,917,135)
124,139
(84,373)
628,845
Net cash generated by operating
activities
24
3,794,875
4,030,086
Cash flows from investing activities
Payments for property, plant &
equipment
Payments for equity-accounted
investments
(615,084)
(590,946)
-
(6,182,635)
Net cash used in investing activities
(615,084)
(6,773,581)
Cash flows from financing activities
Proceeds from issue of equity shares
Payments for share issue costs
Repayment of borrowings
Net cash generated by financing
activities
Net (decrease)/increase in cash and
cash equivalents
Cash and cash equivalents at the
beginning of the year
Effect of exchange rate fluctuations on
cash held
Cash and cash equivalents at the end
of the year
-
-
-
-
13,651,725
(226,079)
(2,026,599)
11,399,047
3,179,791
8,655,552
14,997,486
6,648,039
456,602
(306,105)
18,633,879
14,997,486
The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.
34
ANNUAL REPORT 2021 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
Issued
Capital
$
Reserves
$
Accumulated
Losses
$
Non-con-
trolling
Interests
Total
$
75,353,596
(720,969)
(57,662,374)
55,467
17,025,720
-
-
-
-
3,736,956
(81,096)
3,655,860
(2,037,580)
-
-
(2,037,580)
(2,037,580)
3,736,956
(81,096)
1,618,280
Balance as at 1 January
2020
Profit for the year
Other comprehensive
income for the year
Total comprehensive
income for the year
Issue of ordinary shares
14,172,868
-
Issue of service and
performance rights
Transfer vested service
rights reserve to issued
capital
-
658,882
612,000
(612,000)
Share issue costs
(314,955)
-
-
-
-
-
-
-
-
-
14,172,868
658,882
-
(314,955)
Balance as at 31
December 2020
Balance as at 1 January
2021
Profit for the year
Other comprehensive
income for the year
Total comprehensive
income for the year
89,823,509
(2,711,667)
(53,925,418)
(25,629)
33,160,795
89,823,509
(2,711,667)
(53,925,418)
(25,629)
33,160,795
-
-
-
-
8,082,465
(48,435)
8,034,030
3,179,413
-
-
3,179,413
3,179,413
8,082,465
(48,435)
11,213,443
Issue of ordinary shares
429,694
-
-
1,233,206
306,000
(306,000)
-
-
-
-
-
-
429,694
1,233,206
-
Issue of service and
performance rights
Transfer vested service
rights reserve to issued
capital
Balance as at 31
December 2021
90,559,203
1,394,952
(45,842,953)
(74,064)
46,037,138
The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.
35
NOTES TO FINANCIAL
STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING
POLICIES
of parent company) are more useful to the users
and shareholders of the Company who are
predominantly in Australia.
Vmoto Limited (“Vmoto” or “the Company”) is a
limited company incorporated in Australia. The
consolidated financial report of the Company
as at and for the year ended 31 December 2021
comprises the Company and its subsidiaries
(together referred to as the “Group”).
The accounting policies set out below have been
applied consistently to all periods presented in the
consolidated financial statements, and have been
applied consistently by all entities in the Group.
a. Basis of preparation
i. Statement of compliance
The financial report is a general-purpose financial
report which has been prepared in accordance
with Australian Accounting Standards (AASBs)
(including Australian Interpretations) adopted by
the Australian Accounting Standards Board (AASB)
and the Corporations Act 2001. The consolidated
financial report of the Group complies with
International Financial Reporting Standards (IFRSs)
and interpretations adopted by the International
Accounting Standards Board (IASB).
The financial statements were approved by the
Board of Directors on 30th March 2022.
ii.
Basis of measurement
The consolidated financial statements of the Group
are prepared on an accruals basis and are based on
historical costs except where otherwise stated.
iii.
Functional and presentation currency
The consolidated financial statements of the
Group are presented in Australian dollars, which is
different from its functional currency, determined
to be Renminbi. A different presentation currency
has been adopted as the Board of Directors
believe that financial statements presented in
Australian dollar (which is the functional currency
36
iv.
Standards and interpretations affecting
amounts reported in current period (and/or
prior periods)
Accounting Standards that are mandatorily
effective for the current reporting year
The Group has adopted all of the new and revised
Standards and Interpretations issued by the
Australian Accounting Standards Board (AASB) that
are relevant to its operations and effective for an
accounting period that begins on or after 1 January
2020. New and revised Standards and amendments
thereof and Interpretations effective for the current
year that are relevant to the Group include:
• AASB 2018-6 Amendments to Australian
Accounting Standards – Definition of a
Business
• AASB 2018-7 Amendments to Australian
Accounting Standards – Definition of Material
• AASB 2019-1 Amendments to Australian
Accounting Standards – References to the
Conceptual Framework
• AASB 2019-3 Amendments to Australian
Accounting Standards – Interest Rate
Benchmark Reform
• AASB 2019-5 Amendments to Australian
Accounting Standards – Disclosure of the
Effect of New IFRS Standards Not Yet Issued in
Australia.
The Directors have determined that there is no
material impact of the new and revised Standards
and Interpretations on the Group and, therefore, no
material change is necessary to Group accounting
policies
ANNUAL REPORT 2021 Standards and Interpretations in issue not yet
adopted
At the date of authorisation of the financial
statements, the Group has not applied the new
and revised Australian Accounting Standards,
Interpretations and amendments that have
been issued but are not yet effective. Based
on a preliminary review of the standards and
amendments, the Directors do not anticipate a
material change to the Group’s accounting policies,
however further analysis will be performed when
the relevant standards are effective.
v.
Going concern basis
The Group has recorded a profit after tax for the
year ended 31 December 2021 of $8,034,030 (31
December 2020: $3,655,860). At 31 December
2021, the Group had a working capital surplus of
$32,838,446 (31 December 2020: $20,643,919).
The Directors have prepared the financial
statements on a going concern basis, which
contemplates continuity of normal business
activities and the realisation of assets and
settlement of liabilities in the ordinary course
of business. The Directors believe this to be
appropriate for the following reasons:
• the Group has a significant working capital
surplus;
• the Group has long term supply agreements
and demand for its electric two-wheel vehicle
products and the demand for products supply
by the Group is increasing;
• the Group has the ability to further reduce
corporate and other non-sales resources
without materially affecting revenue activities;
• the Group is currently debt free and the
Group’s Stage 1 and 2 of the Nanjing Facility
have been completed and can be used as
security for debt funding if required;
• the Group achieved positive operating cash
flows of $3.8 million for the year ended 31
December 2021;
• the Group’s manufacturing facility in Nanjing,
China was fully operational and manufacturing
unaffected following a successful inspection by
the Nanjing government, in which all health and
virus precautionary requirements were met in
relation to COVID-19. The Company continues
37
to manage this risk by implementing rigorous
health and safety measures at the facility. The
Company is also continually monitoring sales
performance and has the ability to implement
aggressive cost reductions if required;
• the Group has fully paid for and contributed
RMB 30 million (~A$6.4 million) required to
provide the initial working capital for the jointly
invested manufacturing company, Nanjing
Vmoto Soco Intelligent Technology Co, Ltd and
the jointly invested manufacturing company is
fully operational and profitable; and
• the Directors have prepared cash flow
forecasts that indicate the Group will be cash
flow positive for the year ending 31 December
2022 and will enable the Group to pay its debts
as and when they fall due. Furthermore, the
Directors are confident in the Company’s ability
to raise capital if required.
At the date of this Annual Report and having
considered the above factors, the Directors are
confident that the Group and the Company will be
able to continue operations into the foreseeable
future.
b.
Principles of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Company.
Control exists when the Company has the power
to govern the financial and operating policies of an
entity so as to obtain benefits from its activities.
In assessing control, potential voting rights that
currently are exercisable are taken into account.
The financial statements of subsidiaries are included
in the consolidated financial statements from
the date that control commences until the date
that control ceases. The accounting policies of
subsidiaries have been changed when necessary to
align them with the policies adopted by the Group.
Non-controlling interests in equity and results of
the entities that are controlled by the Company
are shown as a separate item in the consolidated
financial statements.
Investments in subsidiaries are carried at cost and
recoverable amount. Refer to Note 1(o).
38
Transactions eliminated on consolidation
Unrealised gains and losses and inter-entity
balances resulting from transactions with or
between subsidiaries are eliminated in full on
consolidation.
c.
Foreign currency translation
The functional currency of each of the Group’s
entities is measured using the currency of the
primary economic environment in which that entity
operates. The consolidated financial statements are
presented in Australian dollars, which is the parent
entity’s functional currency.
Transactions in foreign currencies are initially
recorded in the functional currency at the exchange
rates ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign
currencies are retranslated at the rate of exchange
ruling at the reporting date.
All differences in the consolidated financial report
are taken to the profit & loss with the exception
of differences on foreign currency borrowings
that provide a hedge against a net investment in a
foreign entity. These are taken directly to equity
until the disposal of the net investment, at which
time they are recognised in the profit & loss.
Tax charges and credits attributable to exchange
differences on those borrowings are also
recognised in equity.
Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated
using the exchange rate as at the date of the initial
transaction.
Non-monetary items measured at fair value
in a foreign currency are translated using the
exchange rates at the date when the fair value was
determined.
As at the reporting date the assets and liabilities
of these overseas subsidiaries are translated into
the presentation currency of Vmoto at the rate
of exchange ruling at the reporting date and the
income statements are translated at the weighted
average exchange rates for the period where
this rate approximates the rate at the date of the
transaction.
The exchange differences arising on the
retranslation are taken directly to a separate
component of equity.
ANNUAL REPORT 2021 On disposal of a foreign entity, the deferred
cumulative amount recognised in equity relating to
that particular foreign operation is recognised in the
profit & loss.
d.
Revenue recognition
Revenues are recognised at fair value of the
consideration received net of the amount of goods
and services tax (GST or equivalent) payable to the
taxation authority.
Sale of goods
Revenue is measured when or as the control of
the goods or services is transferred to a customer.
Depending on the terms of the contract and the
laws that apply to the contract, control of the goods
and services may be transferred over time or at a
point in time.
If control of the goods and services transfers
over time, revenue is recognised over the period
of the contract by reference to the progress
towards complete satisfaction of that performance
obligation. Otherwise (and in most instances),
revenue is recognised at a point in time when the
customer obtains control of the goods and services.
Contracts with customers may include multiple
performance obligations. For such arrangements,
the Company allocates revenue to each
performance obligation based on its relative
standalone selling price which are generally
based on the prices charged to customers. If the
standalone selling price is not directly observable,
it is estimated using expected cost plus a margin or
adjusted market assessment approach, depending
on the availability of observable information.
If a customer pays consideration before the
Company transfers the goods to the customer, the
Company presents the contract liability (referred
to as advance and deposits from customers) when
the payment is made. A contract liability is the
Company’s obligation to transfer goods or services
to a customer for which the Company has received
consideration.
Interest income
Interest income is recognised using the effective
interest method.
e.
Trade and other receivables
Trade and other receivables include amounts due
from customers for goods sold in the ordinary
course of business. Receivables expected to
be collected within 12 months of the end of the
reporting period are classified as current assets.
All other receivables are classified as non-current
assets.
Trade and other receivables are initially recognised
at fair value and subsequently measured at
amortised cost using the effective interest method,
less any provision for impairment.
f.
Acquisition of assets
All assets acquired including plant and equipment
and intangibles other than goodwill are initially
recorded at their cost of acquisition at the date of
acquisition, being the fair value of the consideration
provided plus incidental costs directly attributable
to the acquisition.
When equity instruments are issued as
consideration, their market price at the date of
acquisition is used as fair value. Transaction costs
arising on the issue of equity instruments are
recognised directly in equity subject to the extent of
proceeds received, otherwise expensed.
g.
Business Combination
Acquisitions of businesses are accounted for
using the acquisition method. The consideration
transferred in a business combination is measured
at fair value which is calculated as the sum of the
acquisition-date fair values of assets transferred
by the Group, liabilities incurred by the Group to
the former owners of the acquire and the equity
instruments issued by the Group in exchange for
control of the acquiree. Acquisition-related costs
are recognised in profit or loss as incurred.
At the acquisition date, the identifiable assets
acquired and the liabilities assumed are recognised
at their fair value, except that:
• deferred tax assets or liabilities and assets
or liabilities related to employee benefit
arrangements are recognised and measured in
accordance with AASB 112 ‘Income Taxes’ and
AASB 119 ‘Employee Benefits’ respectively;
• liabilities or equity instruments related
to share-based payment arrangements
of the acquiree or share-based payment
39
arrangements of the Group entered into to
replace share-based payment arrangements
of the acquire are measured in accordance
with AASB 2 ‘Share-based Payment’ at the
acquisition date; and
• assets (or disposal groups) that are classified
as held for sale in accordance with AASB
5 ‘Non-current Assets Held for Sale and
Discontinued Operations’ are measured in
accordance with that Standard.
Goodwill is measured as the excess of the sum of
the consideration transferred, the amount of any
non-controlling interests in the acquiree, and the
fair value of the acquirer’s previously held equity
interest in the acquiree (if any) over the net of
the acquisition-date amounts of the identifiable
assets acquired and the liabilities assumed. If,
after reassessment, the net of the acquisition-
date amounts of the identifiable assets acquired
and liabilities assumed exceeds the sum of the
consideration transferred, the amount of any
non-controlling interests in the acquiree and the
fair value of the acquirer’s previously held interest
in the acquiree (if any), the excess is recognised
immediately in profit or loss as a bargain purchase
gain.
Non-controlling interests that are present ownership
interests and entitle their holders to a proportionate
share of the entity’s net assets in the event of
liquidation may be initially measured either at
fair value or at the non-controlling interests’
proportionate share of the recognised amounts of
the acquiree’s identifiable net assets. The choice of
measurement basis is made on a transaction-by-
transaction basis. Other types of non-controlling
interests are measured at fair value or, when
applicable, on the basis specified in another
Standard.
Where the consideration transferred by the Group
in a business combination includes assets or
liabilities resulting from a contingent consideration
arrangement, the contingent consideration is
measured at its acquisition-date fair value. Changes
in the fair value of the contingent consideration
that qualify as measurement period adjustments
are adjusted retrospectively, with corresponding
adjustments against goodwill. Measurement
period adjustments are adjustments that arise
from additional information obtained during the
‘measurement period’ (which cannot exceed one
year from the acquisition date) about facts and
circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair
value of contingent consideration that do not qualify
as measurement period adjustments depends
on how the contingent consideration is classified.
Contingent consideration that is classified as equity
is not remeasured at subsequent reporting dates
and its subsequent settlement is accounted for
within equity. Contingent consideration that is
classified as an asset or liability is remeasured at
subsequent reporting dates in accordance with
AASB 139, or AASB 137 ‘Provisions, Contingent
Liabilities and Contingent Assets’, as appropriate,
with the corresponding gain or loss being
recognised in profit or loss.
Where a business combination is achieved in
stages, the Group’s previously held equity interest
in the acquire is remeasured to its acquisition date
fair value and the resulting gain or loss, if any, is
recognised in profit or loss. Amounts arising from
interests in the acquiree prior to the acquisition
date that have previously been recognised in other
comprehensive income are reclassified to profit or
loss where such treatment would be appropriate if
that interest were disposed of.
If the initial accounting for a business combination
is incomplete by the end of the reporting period in
which the combination occurs, the Group reports
provisional amounts for the items for which the
accounting is incomplete. Those provisional
amounts are adjusted during the measurement
period (see above), or additional assets or liabilities
are recognised, to reflect new information obtained
about facts and circumstances that existed as of the
acquisition date that, if known, would have affected
the amounts recognised as of that date.
h.
Investment in Associates and Joint Ventures
Associates are those entities over which the Group
is able to exert significant influence but which are
not subsidiaries.
A joint venture is an arrangement that the Group
controls jointly with one or more other investors,
and over which the Group has rights to a share of
the arrangement’s net assets rather than direct
rights to underlying assets and obligations for
underlying liabilities. A joint arrangement in which
the Group has direct rights to underlying assets and
obligations for underlying liabilities is classified as a
joint operation.
40
ANNUAL REPORT 2021 Investments in associates and joint ventures are
accounted for using the equity method. Interests in
joint operations are accounted for by recognising
the Group’s assets (including its share of any assets
held jointly), its liabilities (including its share of any
liabilities incurred jointly), its revenue from the sale
of its share of the output arising from the joint
operation, its share of the revenue from the sale of
the output by the joint operation and its expenses
(including its share of any expenses incurred jointly).
Any goodwill or fair value adjustment attributable to
the Group’s share in the associate or joint venture
is not recognised separately and is included in the
amount recognised as investment.
The carrying amount of the investment in associates
and joint ventures is increased or decreased to
recognise the Group’s share of the profit or loss and
other comprehensive income of the associate and
joint venture, adjusted where necessary to ensure
consistency with the accounting policies of the
Group.
Unrealised gains and losses on transactions
between the Group and its associates and joint
ventures are eliminated to the extent of the Group’s
interest in those entities. Where unrealised losses
are eliminated, the underlying asset is also tested
for impairment.
• Subsequent costs
The cost of replacing part of an item of property,
plant and equipment is recognised in the carrying
amount of the item if it is probable that the future
economic benefits embodied within the part will
flow to the Group and its cost can be measured
reliably. The costs of the day-to-day servicing of
property, plant and equipment are recognised in the
profit & loss as incurred.
• Depreciation
Depreciation is recognised in profit or loss on a
straight-line basis over the estimated useful lives
of each of property, plant and equipment. Leased
assets are depreciated over the shorter of the lease
term and their useful lives unless it is reasonably
certain that the Group will obtain ownership by
the end of the lease term. Land is not depreciated.
Assets will be depreciated once the asset is in
the condition necessary for it to be capable of
operating in the manner intended by management.
The estimated useful lives for the current and
comparative periods are as follows:
Plant and equipment: 3 – 10 years
i.
Property, Plant and Equipment
Motor vehicles: 4 years
• Recognition and measurement
Office furniture & equipment: 5 years
Items of property, plant and equipment are
measured at cost less accumulated depreciation
and accumulated impairment losses.
Building: 20 years
Leasehold improvements: 5 years
Cost includes expenditure that is directly
attributable to the acquisition of the asset. The
cost of assets may include the cost of materials
and direct labour, and any other costs directly
attributable to bringing the assets to a working
condition for its intended use, and the costs of
dismantling and removing the items and restoring
the site on which they are located.
Gains and losses on disposal of an item of property,
plant and equipment are determined by comparing
the proceeds from disposal with the carrying
amount of property, plant and equipment and are
recognised net within “other income” in profit or
loss.
Moulds: 5 years
Depreciation methods, useful lives and residual
values are reviewed at each reporting date.
• Impairment
The carrying values of plant and equipment are
reviewed for impairment when events or changes in
circumstances indicate the carrying value may not
be recoverable.
For an asset that does not generate largely
independent cash inflows, the recoverable amount
is determined for the cash-generating unit to which
the asset belongs.
41
If any such indication exists and where the carrying
values exceed the estimated recoverable amount,
the assets or cash-generating units are written
down to their recoverable amount.
The recoverable amount of property, plant and
equipment is the greater of fair value less costs to
sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their
present value using a pre-tax discount rate that
reflects current market assessments of the time
value of money and the risks specific to the asset.
j. Borrowing costs
Borrowing costs directly attributable to the
acquisition, construction or production of qualifying
assets, which are assets that necessarily take a
substantial period of time to get ready for their
intended use or sale, are added to the cost of those
assets, until such time as the assets are substantially
ready for their intended use or sale.
All other borrowing costs are recognised in profit or
loss in the period in which they are incurred.
k. Payables
Payables, including goods received and services
incurred but not yet invoiced, are recognised at the
nominal amount when the Group becomes obliged
to make future payments as a result of a purchase
of assets or receipt of services.
l. Goods and Services Tax
Revenues, expenses and assets are recognised net
of the amount of goods and services tax (GST),
except where the amount of GST incurred is not
recoverable from the taxation authority. In these
circumstances the GST is recognised as part of the
cost of acquisition of the asset or as part of the
expense.
Receivables and payables are stated with the
amount of GST included. The net amount of GST
recoverable from, or payable to, the tax office
is included as a current asset or liability in the
statement of financial position.
Cash flows are included in the statement of cash
flows on a gross basis. The GST components of
cash flows arising from investing and financing
activities which are recoverable from, or payable to,
the tax office are classified as operating cash flows.
42
ANNUAL REPORT 2021 m. Inventories
Inventories are measured at the lower of cost and
net realisable value. The cost of inventories includes
expenditure incurred in acquiring the inventories,
production or conversion costs and other costs
incurred in bringing them to their existing location
and condition.
Net realisable value is the estimated selling price in
the ordinary course of business, less the estimated
costs of completion and selling expenses.
n. Leases
In the current year, the Group has applied AASB 16
Leases that are effective for an annual period that
begins on or after 1 January 2019.
The Group as lessee
At inception of a contract, the Group assesses if
the contract contains or is a lease. If there is a lease
present, a right-of-use asset and a corresponding
lease liability are recognised by the Group where
the Group is a lessee. However, all contracts that
are classified as short-term leases (i.e., a lease
with a remaining lease term of 12 months or less)
and leases of low-value assets are recognised as
operating expenses on a straight-line basis over the
term of the lease.
Initially the lease liability is measured at the present
value of the lease payments still to be paid at the
commencement date. The lease payments are
discounted at the interest rate implicit in the lease.
If this rate cannot be readily determined, the Group
uses the incremental borrowing rate.
Lease payments included in the measurement of
the lease liability are as follows:
• fixed lease payments less any lease incentives;
• variable lease payments that depend on an
index or rate, initially measured using the index
or rate at the commencement date;
• the amount expected to be payable by the
lessee under residual value guarantees;
• the exercise price of purchase options, if the
lessee is reasonably certain to exercise the
options;
• lease payments under extension options, if the
lessee is reasonably certain to exercise the
options; and
• payments of penalties for terminating the
lease, if the lease term reflects the exercise of
an option to terminate the lease.
The right-of-use assets comprise the initial
measurement of the corresponding lease liability,
any lease payments made at or before the
commencement date and any initial direct costs.
The subsequent measurement of the right-of-use
assets is at cost less accumulated depreciation and
impairment losses.
Right-of-use assets are depreciated over the lease
term or useful life of the underlying asset, whichever
is the shortest.
Where a lease transfers ownership of the underlying
asset or the cost of the right-of-use asset reflects
that the Group anticipates to exercise a purchase
option, the specific asset is depreciated over the
useful life of the underlying asset.
Where a lease transfers ownership of the underlying
asset or the cost of the right-of-use asset reflects
that the Group anticipates to exercise a purchase
option, the specific asset is depreciated over the
useful life of the underlying asset.
The financial impact from the adoption of this
standard is disclosed in note 13.
The Group as lessor
Upon entering into each contract as a lessor, the
Group assesses if the lease is a finance or operating
lease.
A contract is classified as a finance lease when the
terms of the lease transfer substantially all the risks
and rewards of ownership to the lessee. All other
leases not within this definition are classified as
operating leases.
Rental income received from operating leases is
recognised on a straight-line basis over the term of
the specific lease.
Initial direct costs incurred in entering into an
operating lease (for example, legal cost, costs to set
up equipment) are included in the carrying amount
of the leased asset and recognised as an expense
on a straight-line basis over the lease term.
Rental income due under finance leases are
recognised as receivables at the amount of the
Group’s net investment in the leases.
43
When a contract is determined to include lease and
non-lease components, the Group applies AASB 15
to allocate the consideration under the contract to
each component.
o.
Recoverable amount of assets
At each reporting date, the Group assesses
whether there is any indication that an asset may
be impaired. Where an indicator of impairment
exists, the Group makes a formal estimate of
recoverable amount. Where the carrying amount of
an asset exceeds its recoverable amount the asset
is considered impaired and is written down to its
recoverable amount.
Recoverable amount is the greater of fair value less
costs to sell and value in use. It is determined for
an individual asset, unless the asset’s value in use
cannot be estimated to be close to its fair value
less costs to sell and it does not generate cash
inflows that are largely independent of those from
other assets or groups of assets, in which case, the
recoverable amount is determined for the cash-
generating unit to which the asset belongs.
In assessing value in use, the estimated future cash
flows are discounted to their present value using a
pre-tax discount rate that reflects current market
assessments of the time value of money and the
risks specific to the asset.
p. Interest-bearing loans and borrowings
The Company operates an incentive scheme to
provide these benefits, known as the Vmoto Limited
Employee Long Term Incentive Plan (the “Plan”).
The cost of these equity-settled transactions with
employees is measured by reference to the fair
value at the date at which they are granted. The fair
value is determined using a Black Scholes Option
Valuation model or Monte Carlo Valuation model.
In valuing equity-settled transactions, no account
is taken of any performance conditions, other
than conditions linked to the price of the shares of
Vmoto Limited (“market conditions”).
The cost of equity-settled transactions is
recognised, together with a corresponding increase
in equity, over the period in which the performance
conditions are fulfilled, ending on the date on which
the relevant employees become fully entitled to the
award (“vesting date”).
The cumulative expense recognised for equity-
settled transactions at each reporting date until
vesting date reflects (i) the extent to which the
vesting period has expired and (ii) the number of
awards that, in the opinion of the Directors of the
Group, will ultimately vest. This opinion is formed
based on the best available information at balance
date. No adjustment is made for the likelihood
of market performance conditions being met as
the effect of these conditions is included in the
determination of fair value at grant date.
All loans and borrowings are initially recognised at
the fair value of the consideration received net of
issue costs associated with the borrowing.
No expense is recognised for awards that do not
ultimately vest, except for awards where vesting is
conditional upon a market condition.
After initial recognition, interest-bearing loans
and borrowings are subsequently measured at
amortised cost using the effective interest method.
Amortised cost is calculated by taking into account
any issue costs, and any discount or premium on
settlement.
Where the terms of an equity-settled award are
modified, as a minimum an expense is recognised as
if the terms had not been modified. In addition, an
expense is recognised for any increase in the value
of the transaction as a result of the modification, as
measured at the date of modification.
Gains and losses are recognised in the profit & loss
when the liabilities are derecognised as well as
through the amortisation process.
q. Share-based payment transactions
The Group provides benefits to employees
(including Directors) of the Group in the form
of share-based payment transactions, whereby
employees render services in exchange for shares,
options or rights over shares (‘equity-settled
transactions’).
44
Where an equity-settled award is cancelled,
it is treated as if it had vested on the date of
cancellation, and any expense not yet recognised
for the award is recognised immediately. However, if
a new award is substituted for the cancelled award,
and designated as a replacement award on the date
that it is granted, the cancelled and new award are
treated as if they were a modification of the original
award, as described in the previous paragraph.
ANNUAL REPORT 2021 The dilutive effect, if any, of outstanding weighted
average number of options as at the reporting date
is considered not material and accordingly the basic
loss per share is the same as the diluted loss per
share.
Deferred tax is measured at the tax rates that
are expected to be applied to the temporary
differences when they reverse, based on the laws
that have been enacted or substantively enacted by
the reporting date.
r.
Employee benefits
Liabilities for employee benefits for wages, salaries
and annual leave represent present obligations
resulting from employees’ services provided to
reporting date, calculated at undiscounted amounts
based on remuneration, wage and salary rates
that the Group expects to pay as at reporting
date including related on-costs, such as workers
compensation insurance and payroll tax.
s.
Income tax
Income tax expense recognised in the statement
of profit or loss and other comprehensive income
relates to current tax and deferred tax. Income tax
expense is recognised in profit or loss except to the
extent that it relates to items recognised directly in
equity, in which case it is recognised in equity.
Current tax
Current tax is the expected tax payable on the
taxable income for the year, using tax rates enacted
or substantively enacted at the reporting date,
and any adjustment to tax payable in respect of
previous years.
Deferred tax
Deferred tax is recognised using the balance sheet
method, providing for temporary differences
between the carrying amounts of assets and
liabilities for financial reporting purposes and
amounts used for taxation purposes.
Deferred tax is not recognised for the following
temporary differences:
i.
the initial recognition of assets or liabilities in
a transaction that is not a business combination
and, at the time of the transaction, affects
neither the accounting profit nor taxable profit
or loss; and
ii.
differences relating to investments in
subsidiaries and jointly controlled entities to
the extent that it is probable that they will not
reverse in the foreseeable future.
Deferred tax assets and liabilities are offset if there
is a legally enforceable right to offset current tax
liabilities and assets, and they relate to income
taxes levied by the same tax authority on the same
taxable entity, or on different tax entities, but they
intend to settle current tax liabilities and assets on
a net basis or their tax assets and liabilities will be
realised simultaneously.
A deferred tax asset is recognised to the extent
that it is probable that future taxable profits will be
available against which the temporary difference
can be utilised. Deferred tax assets are reviewed at
each reporting date and are reduced to the extent
that it is no longer probable that the related tax
benefit will be realised.
The Company and its subsidiaries have unused
tax losses as at the reporting date. However, no
deferred tax balances have been recognised, as it is
considered that asset recognition criteria have not
been met at this time.
t.
Intangibles
Trademarks, licenses and production rights
Trademarks, licenses and production rights are
recognised at cost of acquisition. Licenses and
production rights have an indefinite life and are
carried at cost less any accumulated impairment
losses. Trademark is estimated to have a useful
life of five years and is amortised over a five-
year period. The carrying values of trademark are
reviewed for impairment when events or changes in
circumstances indicate the carrying value may not
be recoverable.
Patents
Patents acquired in a business combination and
recognised separately from goodwill are initially
recognised at their fair value at the acquisition date
(which is regarded as their costs). Subsequent to
initial recognition, patents acquired in a business
combination are reported at cost less accumulated
amortisation and accumulated impairment losses,
on the same basis as patents that are acquired
separately.
45
Customer contracts
Customer contracts acquired in a business
combination and recognised separately from
goodwill are initially recognised at their fair value
at the acquisition date (which is regarded as their
costs). Subsequent to initial recognition, customer
contracts acquired in a business combination are
reported at cost less accumulated amortisation and
accumulated impairment losses, on the same basis
as patents that are acquired separately.
u.
Development Costs
Development costs are capitalised only when
technical feasibility studies identify that the project
is expected to deliver future economic benefits and
these benefits can be measured reliably. Capitalised
development costs have a finite useful life and
are amortised on a systematic basis based on the
future economic benefits over the useful life of the
project.
v.
Provisions
Provisions are recognised when the Group has a
legal or constructive obligation, as a result of past
events, for which it is probable that an outflow of
economic benefits will result and that outflow can
be reliably measured.
Provisions are measured using the best estimate of
the amounts required to settle the obligation at the
end of the reporting period.
w. Cash and cash equivalents
Cash and cash equivalents include cash on hand,
deposits available on demand with banks and other
short-term highly liquid investments with maturities
of 3 months or less.
x.
Comparative figures
This Annual Report relates to the year ended 31
December 2021. Comparatives are for the year
ended 31 December 2020.
y. Fair value of assets and liabilities
The Group measures some of its assets and
liabilities at fair value on either a recurring or non-
recurring basis, depending on the requirements of
the applicable Accounting Standard.
Fair value is the price the Group would receive
to sell an asset or would have to pay to transfer
a liability in an orderly (ie unforced) transaction
between independent, knowledgeable and willing
market participants at the measurement date.
As fair value is a market-based measure, the closest
equivalent observable market pricing information
is used to determine fair value. Adjustments to
market values may be made having regard to
the characteristics of the specific asset or liability.
The fair values of assets and liabilities that are not
traded in an active market are determined using
one or more valuation techniques. These valuation
techniques maximise, to the extent possible, the use
of observable market data.
To the extent possible, market information is
extracted from either the principal market for the
asset or liability (ie the market with the greatest
volume and level of activity for the asset or liability)
or, in the absence of such a market, the most
advantageous market available to the entity at
the end of the reporting period (ie the market that
maximises the receipts from the sale of the asset
or minimises the payments made to transfer the
liability, after taking into account transaction costs
and transport costs).
For non-financial assets, the fair value measurement
also takes into account a market participant’s ability
to use the asset in its highest and best use or to sell
it to another market participant that would use the
asset in its highest and best use.
The fair value of liabilities and the entity’s own
equity instruments (excluding those related to
share-based payment arrangements) may be
valued, where there is no observable market price in
relation to the transfer of such financial instruments,
by reference to observable market information
where such instruments are held as assets. Where
this information is not available, other valuation
techniques are adopted and, where significant,
are detailed in the respective note to the financial
statements.
Valuation techniques
In the absence of an active market for an identical
asset or liability, the Group selects and uses one
or more valuation techniques to measure the fair
value of the asset or liability, The Group selects
a valuation technique that is appropriate in the
circumstances and for which sufficient data is
46
ANNUAL REPORT 2021 available to measure fair value. The availability of
sufficient and relevant data primarily depends on
the specific characteristics of the asset or liability
being measured. The valuation techniques selected
by the Group are consistent with one or more of the
following valuation approaches:
Market approach: valuation techniques that use
prices and other relevant information generated by
market transactions for identical or similar assets or
liabilities.
Income approach: valuation techniques that
convert estimated future cash flows or income and
expenses into a single discounted present value.
Cost approach: valuation techniques that reflect the
current replacement cost of an asset at its current
service capacity.
Each valuation technique requires inputs that reflect
the assumptions that buyers and sellers would
use when pricing the asset or liability, including
assumptions about risks. When selecting a valuation
technique, the Group gives priority to those
techniques that maximise the use of observable
inputs and minimise the use of unobservable
inputs. Inputs that are developed using market data
(such as publicly available information on actual
transactions) and reflect the assumptions that
buyers and sellers would generally use when pricing
the asset or liability are considered observable,
whereas inputs for which market data is not
available and therefore are developed using the
best information available about such assumptions
are considered unobservable.
Fair value hierarchy
AASB 13 requires the disclosure of fair value
information by level of the fair value hierarchy, which
categorises fair value measurements into one of
three possible levels based on the lowest level that
an input that is significant to the measurement can
be categorised into as follows:
Level 1
Measurements based on quoted prices (unadjusted)
in active markets for identical assets or liabilities that
the entity can access at the measurement date.
Measurements based on inputs other than quoted
prices included in Level 1 that are observable for the
asset or liability, either directly or indirectly.
Level 2
Measurements based on inputs other than quoted
prices included in Level 1 that are observable for the
asset or liability, either directly or indirectly.
Level 3
Measurements based on unobservable inputs for
the asset or liability.
The fair values of assets and liabilities that are not
traded in an active market are determined using
one or more valuation techniques. These valuation
techniques maximise, to the extent possible, the use
of observable market data. If all significant inputs
required to measure fair value are observable, the
asset or liability is included in Level 2. If one or more
significant inputs are not based on observable
market data, the asset or liability is included in Level
3.
The Group would change the categorisation
within the fair value hierarchy only in the following
circumstances:
if a market that was previously considered
i.
active (Level 1) became inactive (Level 2 or Level
3) or vice versa; or
ii.
if significant inputs that were previously
unobservable (Level 3) became observable
(Level 2) or vice versa.
When a change in the categorisation occurs, the
Group recognises transfers between levels of the
fair value hierarchy (i.e. transfers into and out of
each level of the fair value hierarchy) on the date
the event or change in circumstances occurred.
z. Critical judgements in applying accounting
policies and key sources of estimation
uncertainty
The following are the key assumptions concerning
the future, and other key sources of estimation
uncertainty at the end of the reporting period,
that have a significant risk of causing a material
adjustment to the carrying amounts of assets and
liabilities within the next financial year.
Contingent liabilities
The Company is currently a defendant in one
proceeding brought against it by a former
employee in relation to the employee’s past
47
employment. Having considered legal advice, the
Directors believe that the claims can be successfully
defended, without any losses (including for costs)
being incurred by the Company.
The carrying amount of goodwill at 31 December
2021 was nil (31 December 2020: nil).
Useful lives of property, plant and equipment and
trademarks
The Group reviews the estimated useful lives of
property, plant and equipment and patents at the
end of each reporting period. During the current
year, the directors determined that the useful lives
of property, plant and equipment and trademarks
are deemed to be no change.
Fair value measurements and valuation processes
in relation to business combination acquisition
As part of business combination, assets and
liabilities are measured at fair value for reporting
purposes. The Directors have determined the
appropriate valuation techniques and inputs for fair
value measurements.
In estimating the fair value of plant and equipment,
the Group uses Level 3 inputs to perform the
valuation.
In estimating the fair value of customer base, the
Group uses Level 3 inputs to perform the valuation.
48
ANNUAL REPORT 2021 2. REVENUES AND EXPENSES
(a) Other income
Interest income
Contributions from customers
Government subsidies
Net foreign exchange gain
Rent income
Other income
(b) Other expenses
Net foreign exchange loss
(c) Employee benefits expense
Wages and salaries costs
(d) Depreciation and amortisation
Depreciation of property, plant and equipment
1,643,173
Amortisation of intangibles
3. AUDITOR’S REMUNERATION
Audit services:
Audit of financial reports by Hall Chadwick WA
Audit Pty Ltd
4. INCOME TAX
(a) Income tax credit / (expense)
Current tax
Deferred tax
-
1,643,173
92,946
92,946
(715,154)
-
(715,154)
Year ended
31 December 2021
$
Year ended
31 December 2020
$
189,705
960,686
314,434
-
812,566
16,950
124,510
817,559
292,794
44,909
440,378
37,281
2,294,341
1,757,431
491,927
491,927
4,549,996
4,549,996
-
-
3,436,619
3,436,619
1,296,316
297,766
1,594,082
93,592
93,592
(564,512)
-
(564,512)
49
Year ended
31 December 2021
$
Year ended
31 December 2020
$
(b) Numerical reconciliation between tax benefit/(expense) and pre-tax net profit
Profit before income tax expense
Income tax credit/(expense) calculated at 30%
Effect on amounts which are not tax deductible:
Non-deductible items
Effect of different tax rates of subsidiaries
operating in other jurisdictions
Deferred tax not brought to account
Income tax credit / (expense)
(c) Tax losses
8,749,184
(2,624,755)
(488,083)
1,899,293
498,391
(715,154)
3,655,860
(1,005,362)
276,849
491,109
(327,108)
(564,512)
Unused tax losses for which no deferred tax asset has been recognised (as recovery is currently not
probable)
Potential at 30% (31 December 2020: 27.5%)
7,555,938
7,412,549
All tax losses relate to Australian based entities.
(d) Unrecognised temporary differences
Temporary differences for which deferred tax assets have not been recognised:
Accrued expenses
Unrecognised deferred tax assets relating to the
above temporary differences
19,500
19,500
16,500
16,500
(e) Current tax liabilities
Income tax payable
(f) Deferred tax balances
9,451
308,254
Deferred tax balances are presented in the consolidated statement of financial position as follows:
Deferred tax liabilities
(g) Tax Rates
-
-
-
-
The potential tax benefit at 31 December 2021 in respect of tax losses not brought into account has been
calculated at 30% for Australian entities. The tax rate applied for the year ended 31 December 2020 was
27.5%. The tax benefit and expense at 31 December 2021 in respect of tax effect brought into account in
relation to China operations has been calculated at 25% for China entities. The tax benefit and expense at
31 December 2021 in respect of tax effect brought into account in relation to Europe operations has been
calculated at 25% for the Netherlands entities and 24% for Italy entities.
50
ANNUAL REPORT 2021 Year ended
31 December 2021
$
Year ended
31 December 2020
$
5. CASH AND CASH EQUIVALENTS
Cash and bank balances
18,633,879
14,997,486
6. TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Less: Provision for impairment loss
Other receivables
Less: Provision for impairment loss
7,595,767
-
7,595,767
7,217,204
14,812,971
7,181,176
-
7,181,176
1,835,033
(291,333)
8,724,876
Impaired trade receivables – Expected credit losses
Trade receivables are non-interest bearing and are generally on 30-60 days terms. A provision for
expected credit losses is by reference to past default experience and an analysis of the ageing and known
financial position of the debtor. The Company writes off a receivable when there is information indicating
that the debtor is in severe financial difficulty and there is no realistic prospect of recovery.
51
Movements in the provision for impairment of trade and other receivables were as follows:
Year ended
31 December 2021
$
Year ended
31 December 2020
$
At beginning of the period
Provision for impairment during the period
Write off
At end of the period
291,333
-
(291,333)
-
At 31 December 2021, the ageing analysis of trade and other receivables is as follows:
0 – 30 Days
31 – 60 Days
61 – 90 Days past due not impaired
+90 Days past due not impaired
+90 Days considered impaired
Provision for impairment
5,736,203
948,505
677,478
7,450,785
-
-
14,812,971
291,333
-
-
291,333
7,250,093
562,502
144,346
767,935
291,333
(291,333)
8,724,876
As of 31 December 2021, trade and other receivables of $8,690,567 (31 December 2020: $912,281)
were past due but not impaired. $2,354,260 of the $8,128,263 past due relates to deferred payment
arrangement with a B2B customer. The customer has been making payments on time in full.
$5,621,622 of the $8,128,763 past due relates to a short-term advance to Nanjing Vmoto Soco Intelligent
Technology Co, Ltd (Vmoto Soco Manufacturing), which is the Company’s jointly owned Chinese
registered manufacturing company. The short-term advance has been repaid to the Company subsequent
to the 2021 financial year.
The remaining trade and other receivables relate to a number of independent customers for whom there
is no recent history of default.
7. INVENTORIES
Raw materials
Semi-finished goods
Finished goods
8. OTHER ASSETS
Prepayments
2,925,039
7,621
9,594,796
12,527,456
1,003,746
24,764
3,459,213
4,487,723
3,847,521
437,710
The prepayments are payments in advance to suppliers for the supply of electric motorcycle/moped
inventories for the Group’s electric two-wheel vehicle operations.
52
ANNUAL REPORT 2021 Plant &
equipment
Motor
vehicles
Land
Building
Total
9. PROPERTY, PLANT & EQUIPMENT
Year ended 31 December 2020
At 1 January 2020, net of
accumulated depreciation
1,367,705
42,781
1,040,852
4,793,146
7,244,484
Additions
75,086
62,856
Depreciation for the period
(608,104)
(14,540)
-
-
426,968
564,910
(559,712)
(1,182,356)
Exchange differences
(39,267)
(5,313)
(29,426)
(56,475)
(130,481)
At 31 December 2020,
net of accumulated
depreciation
At 31 December 2020
795,420
85,784
1,011,426
4,603,927
6,496,557
Cost
1,924,486
127,392
1,011,426
6,971,520
10,034,824
Accumulated depreciation
(1,129,066)
(41,608)
-
(2,367,593)
(3,538,267)
Net carrying amount
795,420
85,784
1,011,426
4,603,927
6,496,557
Year ended 31 December 2021
At 1 January 2021, net of
accumulated depreciation
795,420
85,784
1,011,426
4,603,927
6,496,557
Additions
67,645
321,177
Depreciation for the period
(465,271)
(23,889)
-
-
114,381
503,203
(1,045,421)
(1,534,581)
Exchange differences
26,052
3,568
88,524
404,751
522,895
At 31 December 2021,
net of accumulated
depreciation
At 31 December 2021
423,846
386,640
1,099,950
4,077,638
5,988,074
Cost
2,039,440
431,278
1,099,950
7,725,968
11,296,636
Accumulated depreciation
(1,615,594)
(44,638)
-
(3,648,330)
(5,308,562)
Net carrying amount
423,846
386,640
1,099,950
4,077,638
5,988,074
1. During 2019, an independent external property valuation company valued the Company’s Nanjing land
and Stage 1 & Stage 2 buildings at $12.7 million AUD.
53
Goodwill
Licences,
trademarks
and production
rights
Development
Costs
Total
-
-
-
297,766
(297,766)
-
-
-
-
297,766
(297,766)
-
10. INTANGIBLES
Year ended 31 December 2020
Balance at 1 January 2020
Amortisation for the period
Balance at 31 December 2020
At 31 December 2020
Cost
3,971,428
2,015,687
4,836,105
10,823,220
Accumulated amortisation
-
(797,102)
(565,657)
(1,362,759)
Accumulated impairment
(3,971,428)
(1,218,585)
(4,270,448)
(9,460,461)
Net carrying amount
Year ended 31 December 2021
Balance at 1 January 2021
Amortisation for the period
Balance at 31 December 2021
At 31 December 2021
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Cost
3,971,428
2,015,687
4,836,105
10,823,220
Accumulated amortisation
-
(797,102)
(565,657)
(1,362,759)
Accumulated impairment
(3,971,428)
(1,218,585)
(4,270,448)
(9,460,461)
Net carrying amount
-
-
-
-
54
ANNUAL REPORT 2021 11. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD
On 24 February 2020, Vmoto entered into a joint investment agreement with Super Soco Intelligent
Technology (Shanghai) Co, Ltd to establish a new jointly owned Chinese registered manufacturing
company, Nanjing Vmoto Soco Intelligent Technology Co Ltd (Vmoto Soco Manufacturing). Under the terms
of the agreement, Vmoto was required to contribute RMB 30 million (~A$5.9 million) in cash and/or assets
by end of June 2020, which served as the initial working capital for Vmoto Soco Manufacturing. Vmoto
has fulfilled this commitment. Super Soco will also contribute RMB 30 million (~A$5.9 million) in cash and/or
assets progressively by no later than June 2025, based on the commercial requirements of the joint venture
company. This may include contributions of Super Soco’s intangible assets, including patents and molds.
Vmoto has a 50% equity interest in Vmoto Soco Manufacturing, and it is the sole and exclusive
manufacturer for both Vmoto’s and Super Soco’s electric scooter and motorcycle products.
The Group’s interest in Vmoto Soco Manufacturing is accounted for using equity method in the
consolidated financial statements as the Group does not control or have joint control over Vmoto Soco
Manufacturing. Summarised financial information of the Group’s share in Vmoto Soco Manufacturing is as
follows:
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets (100%)
Group’s share of net assets (50%)
31 December 2021
$
31 December 2020
$
31,320,307
6,970,398
20,074,222
6,014,106
(24,024,949)
(14,200,557)
-
14,265,756
7,132,878
-
11,887,771
5,943,885
Carrying amount of interest in equity accounted
investments
7,132,878
5,943,885
Revenue
Cost of sales
Administrative expenses
Profit/(Loss) for the period from continuing
operations (100%)
Other comprehensive income
Total comprehensive income for the period from
continuing operations (100%)
Group’s share of losses for the period (50%)
Year ended
31 December 2021
$
Year ended
31 December 2020
$
54,018,270
(43,716,551)
(9,021,377)
38,477,854
(30,378,306)
(8,142,810)
1,280,342
(43,262)
-
1,280,342
640,171
-
(43,262)
(21,631)
During the FY2021, the Group purchases $60,022,010 of goods from Vmoto Soco Manufacturing.
Vmoto Soco Manufacturing had no contingent liabilities or capital commitments as at 31 December 2021.
55
12. TRADE AND OTHER PAYABLES
Current – unsecured
Trade creditors
Advance and deposits from customers
Other creditors and accruals
Year ended
31 December 2021
$
Year ended
31 December 2020
$
4,058,010
10,686,808
2,118,617
16,863,435
Buildings
$
1,640,926
4,235,260
1,712,020
7,588,206
Total
$
13. LEASES
The Group leases warehouse and office facilities in Netherlands and Italy for its electric two-wheel vehicle
distribution and after sales operations. The leases typically run for a period between 5 and 6 years, with
an option to renew the lease after that date. Lease payments are adjusted based on changes in local
price indices. The Group is restricted from entering into any sub-lease arrangements.
With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected
in the consolidated statement of financial position as a right-of-use assets and lease liabilities. The Group
classifies its right-of-use assets in a consistent manner to its property, plant and equipment.
Right-of-use assets
Year ended 31 December 2021
Gross carrying amount
Balance at 1 January 2021
Additions
Disposals
Exchange difference
Balance at 31 December 2021
Depreciation and impairment
Balance at 1 January 2021
Depreciation
Balance at 31 December 2021
617,497
617,497
-
-
(15,122)
602,375
(138,892)
(102,974)
(241,866)
-
-
(15,122)
602,375
(138,892)
(102,974)
(241,866)
Net carrying amount at 31 December 2021
360,509
360,509
56
ANNUAL REPORT 2021 13. LEASES (CONTINUED)
Gross carrying amount
Balance at 1 January 2020
Additions
Disposals
Balance at 31 December 2020
Depreciation and impairment
Balance at 1 January 2020
Depreciation
Balance at 31 December 2020
Net carrying amount at 31 December 2020
Lease liabilities
Current
Non-current
Buildings
$
Total
$
617,497
617,497
-
-
-
-
617,497
617,497
(27,548)
(111,344)
(138,892)
478,605
(27,548)
(111,344)
(138,892)
478,605
31 Dec 2021
$
31 Dec 2020
$
110,494
282,768
393,262
107,416
402,171
509,587
Total cash outflow for leases for the year ended 31 December 2021 was $146,584 (FY2020: $146,427).
Operating leases
The Group leases out partial of its Nanjing manufacturing facilities and these leases have been classified
as operating leases because they do not transfer substantially the risks and rewards incidental to the
ownership of the assets.
Rental income recognised by the Group during the year ended 31 December 2021 was $812,566 (FY2020:
$440,378).
57
14. ISSUED CAPITAL AND RESERVES
Issued capital
279,360,084 (31 December 2020:
277,347,515) fully paid ordinary
shares
The following movements in issued capital occurred during the period:
31 December
2021
$
31 December
2020
$
90,559,203
89,823,509
Number of
Shares
31 Dec 2021
Number of
Shares
31 Dec 2020
Year ended
31 Dec 2021
$
Year ended
31 Dec 2020
$
Balance at beginning of period
277,347,515
224,762,983
89,823,509
75,353,596
Issue of Shares at nil consideration
Issue of Shares at 16.6297 cents each
Issue of Shares at 6.5 cents each
Issue of Shares at 8.5 cents each
Issue of Shares at 34 cents each
Issue of Shares at 34 cents each
Issue of Shares at 45 cents each
Issue of Shares at nil consideration
Issue of Shares at nil consideration
Issue of Shares at 44.5 cents each
Issue of Shares at 36.5 cents each
Issue of Shares at nil consideration
Vesting of share-based expenses
Share issue costs
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
k)
l)
-
-
-
-
-
-
-
-
2,850,000
23,737,844
1,982,174
282,174
378,808
242,424
21,411,108
1,700,000
970,000
89,888
102,681
850,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
40,000
37,500
306,000
-
3,947,500
128,841
23,985
128,795
82,424
9,635,000
612,000
-
-
-
-
352,194
226,324
-
(314,956)
Balance at end of period
279,360,084 277,347,515
90,559,203
89,823,509
58
ANNUAL REPORT 2021 a.
17 March 2020 – Issue 2,850,000 shares at nil consideration to employees of the Company in
recognition of their efforts and contribution to the Company. These share-based expenses will be
recognised over a three-year vesting period.
b. 19 May 2020 – Issue 23,737,844 shares at 16.6297 cents each pursuant to completion of share purchase
plan.
c. 21 May 2020 – Issue 1,982,174 shares at 6.5 cents each as a result of exercise of options.
d. 21 May 2020 – Issue 282,174 shares at 8.5 cents each as a result of exercise of options.
e. 2 July 2020 – Issue 378,808 shares at 34 cents each to a director in lieu of unpaid director fees.
f. 2 July 2020 – Issue 242,424 shares at 34 cents each to a director in lieu of unpaid Director fees.
g. 18 August 2020 – Issue 21,411,108 shares at 45 cents each for completion of a $9.6 million placement.
h. 22 December 2020 – Issue 1,700,000 shares to directors as a result of vest of 1,700,000 service rights.
i. 8 February 2021 – Issue 970,000 shares at nil consideration to employees of the Company in
recognition of their efforts and contribution to the Company. These share-based expenses will be
recognised over a three-year vesting period.
j.
13 May 2021 – Issue 89,888 shares at 44.5 cents each to a director in lieu of unpaid Director fees.
k.
13 May 2021 – Issue 102,681 shares at 36.5 cents each to a director in lieu of unpaid Director fees.
l. 20 December 2021 – Issue 850,000 shares to directors as a result of vest of 850,000 service rights.
Options
There are no movements of options over unissued ordinary shares of the Company for the year ended 31
December 2021.
Service and performance rights
The Company has the following service and performance rights issued to directors in existence during the
current reporting period.
Class
Grant
date
Expiry
date
Number
of rights
Vested
during
the year
Rights
exercised
2020 service rights
2020 service rights
2020 performance
rights
2021 performance
rights
16 Dec
2020
16 Dec
2020
16 Dec
2020
13 May
2021
18 Dec
2021
18 Dec
2022
31 Dec
2022
31 Dec
2023
850,000
850,000
850,000
4,037,117
1,870,172
-
-
-
-
-
-
-
Rights
vested
at 31 Dec
2021
Rights
unvested
at 31 Dec
2021
850,000
-
-
-
-
850,000
4,037,117
1,870,172
Valuation of the service rights was undertaken using Black-Scholes valuation methodology with the
following factors and assumptions being used in determining the fair value of each right on the grant date.
59
Class
Grant date
Period
(years)
Share price
at grant
date
Risk free
rate (%)
Volatility
(%)
Valuation
per right
2020 service rights
16 Dec 2020
2020 service rights
16 Dec 2020
1
2
$0.36
0.1051
$0.36
0.1051
70%
70%
$0.36
$0.36
Valuation of the performance rights was undertaken using Monte Carlo valuation methodology with the
following factors and assumptions being used in determining the fair value of each right on the grant date.
Class
Grant date
Period
(years)
Share price
at grant
date
Risk free
rate (%)
Volatility
(%)
Valuation
per right
2020 performance
rights
2021 performance
rights
16 Dec 2020
13 May 2021
2
3
$0.36
0.1051%
99.6%
$0.3369
$0.425
0.0800%
70%
$0.1938
Vesting of the service rights issued in the period is subject to continuing employment, with no other
performance conditions.
The performance rights vest subject to:
• Continuing employment
• Minimum performance hurdle of a minimum share price compound annual growth rate (CAGR)
increases of 5% over the performance period
• No performance rights will vest if CAGR is less than 5% over the respective period
• 50% of the performance rights will vest if CAGR of 10% is achieved, up to maximum of 100% of the
performance rights will vest if CAGR of 15% is achieved and pro rata of the performance rights will vest
if CAGR is >5%&<10% and >10%&<15%.
Grant date
Expiry date
Class
Total
valuation
Expense
recorded to
31 Dec 2021
Expense
recorded to
31 Dec 2020
16 Dec 2020
18 Dec 2020
2020 service rights
$612,000
-
$612,000
16 Dec 2020
18 Dec 2021
2020 service rights
$306,000
$293,250
$12,750
16 Dec 2020
18 Dec 2022
2020 service rights
$306,000
$153,000
$6,375
16 Dec 2020
31 Dec 2022
2020 performance rights
$1,360,105
$666,174
$27,757
13 May 2021
31 Dec 2023
2021 performance rights
$362,347
$120,782
-
60
ANNUAL REPORT 2021 31 December 2021
$
31 December 2020
$
Reserves
Reserves at the beginning of the period
(2,711,667)
(720,969)
Transfer expired options reserve to accumulated
losses
Issue of service and performance rights
Transfer vested service rights to issued capital
Movements in foreign currency translation reserve
Reserves at the end of the period
Comprises of:
Share-based payment reserve
Foreign currency translation reserve
Reserves at the end of the period
-
1,233,206
(306,000)
3,179,413
1,394,952
974,088
420,864
1,394,952
-
658,882
(612,000)
(2,037,580)
(2,711,667)
46,882
(2,758,549)
(2,711,667)
The share-based payments reserve is used to recognise the fair value of options issued but not exercised
and to recognise the fair value of service and performance rights issued but not yet vested.
The foreign currency translation reserve is used to recognise exchange differences arising from the
translation of the financial statements of foreign operations.
Year ended
31 December 2021
$
Year ended
31 December 2020
$
15. NON-CONTROLLING INTERESTS
Balance at the beginning of the period
Share of loss for the year
Non-controlling interests arising on incorporation of
subsidiary
Balance at the end of the period
(25,629)
(48,435)
-
(74,064)
55,467
(81,096)
-
(25,629)
61
16. CAPITAL RISK MANAGEMENT
The Group manages its capital to ensure its ability to continue as a going concern and to achieve returns to
the shareholders and benefits for other stakeholders through the optimisation of debt and equity balance.
The capital structure of the Group is adjusted to achieve its goals whilst ensuring the lowest cost of the
capital.
Management monitors capital on the basis of the gearing ratio (debt/total capital). During the year ended
31 December 2021, the Group’s strategy is to utilise lowest cost of the capital from the capital markets and
continuously negotiating lower interest cost with provider of its operating facility to achieve its expansion
program. The gearing ratios at 31 December 2021 and 31 December 2020 were as follows:
Total borrowings
Total equity
Total capital
Gearing ratio
Year ended
31 December 2021
$
Year ended
31 December 2020
$
393,262
46,037,138
509,587
33,160,795
46,430,400
33,670,382
0.8%
1.5%
The gearing ratio of the Company has decreased from 1.5% to 0.8% during the year ended 31 December
2021.
17. ACCUMULATED LOSSES
Accumulated losses at the beginning of the period
(53,925,418)
(57,662,374)
Profit for the period
8,082,465
3,736,956
Transfer from share-based payment reserve
-
-
Accumulated losses at the end of the period
(45,842,953)
(53,925,418)
18. SEGMENT REPORTING
AASB 8 requires operating segments to be identified on the basis of internal reports about components of
the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources
to the segments and to assess their performance.
The continuing operations of the Group are predominantly in the electric two-wheel vehicles manufacture
and distribution industry.
Reported segments were based on the geographical segments of the Group, being Australia, China,
Europe and Singapore. The management accounts and forecasts submitted to the chief operating decision
maker for the purpose of resource allocation and assessment of segment performance are split into these
components.
The electric two-wheel vehicles segment is managed on a worldwide basis, but operates in four principal
geographical areas: Australia, China, Europe and Singapore. In China, manufacturing facilities are operated
in Nanjing. In Europe, the warehouse and distribution centre are operated in Netherlands and Italy. The
following table presents revenue and profit or loss in relation to geographical segments for the twelve-
month period ended 31 December 2021 and 31 December 2020:
62
ANNUAL REPORT 2021 Australia $A
Nanjing, China $A
Europe $A
Year ended
31/12/21
Year ended
31/12/20
Year ended
31/12/21
Year ended
31/12/20
Year ended
31/12/21
Year ended
31/12/20
2,495,265
9,704
80,816,097
54,558,296
6,695,497
4,908,752
136,317
(2,099,840)
7,677,849
5,606,292
146,191
155,992
2,653,678
873,684
86,742,638
70,368,944
6,304,838
2,995,035
(157,175)
(175,259)
(44,996,395)
(39,585,632)
(4,709,114)
(1,834,904)
(649)
(667)
(1,515,349)
(1,140,007)
(127,175)
(155,642)
-
(297,766)
-
-
-
-
Singapore $A
Intersegment elimination $A
Consolidated $A
Year ended
31/12/21
Year ended
31/12/20
Year ended
31/12/21
Year ended
31/12/20
Year ended
31/12/21
Year ended
31/12/20
888,592
3,293,722
(2,433,891)
73,673
(6,584)
-
-
-
88,461,560
62,770,476
8,034,030
3,655,860
256,696
612,604
(32,654,563)
(33,283,425)
63,303,287
41,566,842
(58,028)
(93,677)
32,654,563
33,283,425
(17,266,149)
(8,406,047)
-
-
-
-
-
-
-
-
(1,643,173)
(1,296,316)
-
(297,766)
Revenue
Segment
revenue
Result
Segment
profit/(loss)
Assets
Segment
assets
Liabilities
Segment
liabilities
Depreciation
of fixed
assets
Amortisation
of intangible
assets
Revenue
Segment
revenue
Result
Segment
profit/(loss)
Assets
Segment
assets
Liabilities
Segment
liabilities
Depreciation
of fixed
assets
Amortisation
of intangible
assets
The principal activity of the continuing Group is the design, manufacture, marketing and distribution of
electric two-wheel vehicles.
63
Information about major customers:
The Group has generated revenue from sales to its largest customer at approximately $26.4 million (2020:
$13.3 million). No other single customers contributed 15% or more of the Group’s revenue for the year.
19. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Group’s principal financial instruments comprise bank and other loans, cash and short-term deposits.
The main purpose of these financial instruments is to raise finance for the Group’s operations.
The Group has various other financial instruments such as trade debtors and trade creditors, which arise
directly from its operations.
It is, and has been throughout the period under review, the Group’s policy that no trading in derivative
instruments shall be undertaken.
Fair values
The Directors consider that the carrying amount of financial assets and financial liabilities recorded in the
financial statements approximates their fair values.
The following table details the fair value of financial assets and liabilities of the Group:
31 December 2021
31 December 2020
Carrying
amount
$
Fair Value
$
Carrying
amount
$
Fair Value
$
Financial assets
Cash and cash equivalents
18,633,879
18,633,879
14,997,486
14,997,486
Trade and other receivables
14,812,971
14,812,971
8,724,876
8,724,876
Total financial assets
Financial liabilities
33,446,850
33,446,850
23,722,362
23,722,362
Trade and other payables
16,863,435
16,863,435
7,588,206
7,588,206
Borrowings
Lease liabilities
-
-
-
-
393,262
393,262
509,587
509,587
Total financial liabilities
17,256,697
17,256,697
8,097,793
8,097,793
Net financial assets / (liabilities)
16,190,153
16,190,153
15,624,569
15,624,569
The main risks arising from the Group’s financial instruments are interest rate risk, liquidity risk, foreign
currency risk and credit risk. The Board reviews and agrees policies for managing each of these risks and
they are summarised below.
Sensitivity analysis
In managing interest rate and currency risks, the Company endeavours to reduce the impact of short-term
fluctuations on the Company’s earnings. Over the longer term, however, permanent changes in foreign
exchange and interest rates will have an impact on consolidated earnings, although the extent of that
impact will depend on the level of cash resources held by the Group. A general increase of one percentage
point in interest rates would not be expected to materially impact earnings.
64
ANNUAL REPORT 2021 19. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONT’D)
Interest rate risk
The Group’s exposure to market risk for changes in interest rates relates primarily to the Group’s short-
term debt obligations.
Cash includes funds held in term deposits and cheque accounts during the year, which earned interest at
rates ranging between 0% and 2.5%, depending on account balances.
The Group current do not have credit facilities.
All other financial assets and liabilities are non-interest bearing.
At balance date, the Group had the following mix of financial assets and liabilities exposed to variable
interest rate risk that are not designated in cash flow hedges:
31 December 2021
$
31 December 2020
$
Financial assets
Cash and cash equivalents
18,633,879
14,997,486
Financial liabilities
Bank operating facility
Net exposure
-
-
18,633,879
14,997,486
The following sensitivity analysis is based on the interest rate risk exposures in existence at the reporting
date. At 31 December, if interest rates had moved, as illustrated in the table below, with all other variables
held constant, pre-tax profit and equity would have been affected as follows:
Judgements of reasonable possible movements:
31 December 2021
$
31 December 2020
$
+1% (100 basis points)
Pre-tax profit increase/(decrease)
Equity increase/(decrease)
-1% (100 basis points)
Pre-tax profit increase/(decrease)
Equity increase/(decrease)
Foreign currency risk
186,339
186,339
(186,339)
(186,339)
149,975
149,975
(149,975)
(149,975)
The Group is exposed to foreign currency on sales, purchases and borrowings that are denominated in a
currency other than Australian Dollars. The currency giving rise to this risk is primarily US dollars, Chinese
RMB and Europe Euro.
65
19. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONT’D)
At balance date, the Group had the following exposure to US dollars, Chinese RMB, Europe EUR and
Singapore SGD foreign currency that is not designated in cash flow hedges:
Financial assets
Cash and cash equivalents (USD)
Cash and cash equivalents (RMB)
Cash and cash equivalents (EUR)
Cash and cash equivalents (HKD)
Cash and cash equivalents (SGD)
Trade and other receivables (USD)
Trade and other receivables (RMB)
Trade and other receivables (EUR)
Financial liabilities
Trade and other payables (USD)
Trade and other payables (RMB)
Trade and other payables (EUR)
Borrowings (RMB)
Net exposure
31 December 2021
$
31 December 2020
$
7,210,313
785,890
7,646,960
27,088
23,576
15,693,827
6,918,396
7,001,212
890,344
14,809,952
(7,428,296)
(4,968,960)
(4,315,852)
(16,713,108)
-
5,321,351
5,288,805
858,585
-
-
11,468,741
6,946,449
1,089,188
670,573
8,706,210
(4,584,325)
(2,465,975)
(1,325,317)
(8,375,617)
-
13,790,671
11,799,334
The following sensitivity is based on the foreign currency risk exposures in existence at the reporting date.
At 31 December 2021, had the Australian Dollar moved, as illustrated in the table below, with all other
variables held constant, equity would have been affected as follows:
Judgements of reasonable possible movements:
31 December 2021
$
31 December 2020
$
AUD/USD, AUD/RMB and AUD/EUR +20%
Equity increase/(decrease)
(2,232,902)
(1,881,625)
AUD/USD, AUD/RMB and AUD/EUR -20%
Equity increase/(decrease)
2,679,482
2,257,949
66
ANNUAL REPORT 2021 The Group actively working with banks to hedge this exposure to ensure minimal impacts from foreign
currency risks.
Credit risk
The credit risk on financial assets of the Group which have been recognised on the statement of financial
position is generally the carrying amount, net of any provision for impairment losses.
The Group continuously monitors credit risks arising from its trade receivables which are principally with
significant and reputable companies. It is the Group’s policy that credit verification procedures, including
assessment of credit ratings, financial position, past experience and industry reputation, are performed on
new customers that request credit terms. Risk limits are set for each customer and regularly monitored.
Receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad
debts is not significant.
The total credit risk exposure of the Group could be considered to include the difference between the
carrying amount of the receivable and the realisable amount. At balance sheet date there were no
significant concentrations of credit risk. The maximum exposure to credit risk is represented by the
carrying amount of each financial asset in the balance sheet. Details with respect to credit risk of trade and
other receivables are provided in Note 6.
Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or
otherwise meeting its obligations related to financial liabilities. The Group manages this risk through the
following mechanisms:
1. preparing forward-looking cash flow analyses in relation to its operational, investing and financing
activities;
2. monitoring undrawn credit facilities;
3. obtaining funding from a variety of sources;
4. maintaining a reputable credit profile; and
5. managing credit risk related to financial assets.
67
The table below reflects an undiscounted contractual maturity analysis for financial liabilities.
Financial liability and financial asset maturity analysis
Within 1 Year
1 to 5 Years
Over 5 Years
Total
Year
ended
31/12/21
Year
ended
31/12/20
Year
ended
31/12/21
Year
ended
31/12/20
Year
ended
31/12/21
Year
ended
31/12/20
Year
ended
31/12/21
Year
ended
31/12/20
$000
$000
$000
$000
$000
$000
$000
$000
Consolidated
Group
Financial liabilities due for payment
Bank
operating
facility and
loans
-
-
Trade and
other payables
16,863
7,588
-
-
-
-
Lease liabilities
110
Current tax
liabilities
Other liabilities
9
-
108
308
-
283
402
-
-
-
-
Total
contractual
outflows
Total
expected
outflows
16,982
8,004
283
402
16,982
8,004
283
402
Financial assets – cash flows realisable
Cash and cash
equivalents
18,634
14,997
14,813
8,725
33,447
23,722
-
-
-
-
-
-
Trade
and other
receivables
Total
anticipated
inflows
Net (outflow)/
inflow on
financial
instruments
16,465
15,718
(283)
(402)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
16,863
7,588
393
9
-
510
308
-
17,265
8,406
17,265
8,406
18,634
14,997
14,813
8,725
33,447
23,722
16,182
15,316
Financial assets pledged as collateral
There are no financial assets that have been pledged as security for debt and their realisation into cash is
not restricted.
68
ANNUAL REPORT 2021 20. EARNINGS PER SHARE
Basic earnings per share
From continuing operations
Total earnings per share
Diluted earnings per share
From continuing operations
Total earnings per share
31 December 2021
$
31 December 2020
$
2.89
2.89
2.82
2.82
1.45
1.45
1.45
1.45
The earnings and weighted average number of ordinary shares used in the calculation of basic and diluted
earnings per share are as follows:
Year ended
31 December 2021
$
Year ended
31 December 2020
$
Profit for the year attributable to owners of the Group
8,082,465
3,736,956
Earnings used in the calculation of basic and diluted
earnings/loss per share from continuing operations
8,082,465
3,736,956
Weighted average number of ordinary shares for the
purposes of basic earnings per share
278,363,181
251,540,695
Weighted average number of ordinary shares for the
purposes of diluted earnings/loss per share
285,245,693
252,688,648
69
Country of
Incorporation
Entity interest
31 December 2021
Entity interest 31
December 2020
21. CONTROLLED ENTITIES
Parent entity
Vmoto Limited
Controlled entities
Australia
Vmoto Australia Pty Ltd
Australia
Vmoto Soco International Limited
Hong Kong
Nanjing Vmoto Co, Ltd
Nanjing Vmoto Manufacturing Co,
Ltd
China
China
Vmoto Europe B.V
Netherlands
Vmoto Soco Italy srl
Italy
Vmoto Soco International Pte Ltd
Singapore
China
Nanjing Vmoto Intelligent
Technology Co, Ltd
Associate
Nanjing Vmoto Soco Intelligent
Technology Co, Ltd
100%
100%
100%
100%
100%
50%
100%
100%
100%
100%
100%
100%
100%
50%
100%
-
China
50%
50%
22. KEY MANAGEMENT PERSONNEL DISCLOSURES
Details of Key Management Personnel
(i) Directors
Mr Charles Chen
Managing Director (Executive) – appointed Executive Director 5 January 2007
and Managing Director 1 September 2011
Mr Ivan Teo
Finance Director (Executive) – appointed Chief Financial Officer 17 June 2009 and
Finance Director 29 January 2013
Mr Blair Sergeant
Director (Non-Executive) – appointed 4 November 2020
Ms Shannon Coates
Director (Non-Executive) – appointed 23 May 2014
Mr Kaijian Chen
Director (Non-Executive) – appointed 1 September 2011
70
ANNUAL REPORT 2021 (ii) Executives
Mr Jeffrey Wu
Sales Manager - appointed 1 May 2014
Ms Susan Xie
Sales Manager - appointed 1 March 2010
Mr Adam Cui
Sales Manager - appointed 17 February 2020
Mr Maik Spaan
Europe After Sales & Service Manager - appointed 1 June 2020
Mr Gaetan Orselli
Sales Manager - appointed 1 July 2020
23. KEY MANAGEMENT PERSONNEL DISCLOSURES
The total remuneration paid to Key Management Personnel of the Company and the Group during the
period ended 31 December 2021 was as follows:
Short-term employee benefits
Share-based payments
Year ended
31 December 2021
$
Year ended
31 December 2020
$
1,260,767
1,345,947
1,081,694
907,878
Total KMP compensation
2,606,714
1,989,572
Refer to the remuneration report contained in the Directors’ Report for details of the remuneration paid or
payable to each member of the Group’s Key Management Personnel for the year ended 31 December 2021.
71
24. RECONCILIATION OF CASH FLOWS USED IN OPERATING ACTIVITIES
Year ended
31 December 2021
$
Year ended
31 December 2020
$
Cash flows from operating activities
Profit for the year
Adjustments for:
Depreciation and amortisation
Share based payment expenses
8,034,030
3,655,860
1,643,173
1,662,910
1,594,082
1,096,426
3,306,083
2,690,508
(Increase)/decrease in receivables
(6,088,095)
(6,594,889)
(Increase)/decrease in inventories
(8,039,733)
(119,956)
(Increase)/decrease in other assets
(3,409,811)
3,594,782
(Decrease)/ increase in payables
9,992,401
803,781
Net cash generated by operating activities
3,794,875
4,030,086
25. NON-DIRECTOR RELATED PARTIES
Non-director related parties are the Company’s controlled entities. Details of the Company’s interest in
controlled entities are set out in Note 21. Details of dealings with these entities are set out below.
Transactions - The loans to controlled entities are unsecured, interest-free and of no fixed term. The loans
are provided primarily for capital purchases and working capital purposes.
Receivables - Aggregate amounts receivable from non-director related parties:
Year ended
31 December 2021
$
Year ended
31 December 2020
$
Non-current
Unsecured loans to controlled entities
32,654,563
33,283,425
Provision for non-recovery
(32,654,563)
(33,283,425)
-
-
72
ANNUAL REPORT 2021 27. SUBSEQUENT EVENTS
There has not arisen in the interval between the end of the financial period and the date of this Annual
Report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors,
to affect significantly the operations of the Group, the results of those operations, or the state of affairs of
the Group in future financial years.
28. PARENT ENTITY DISCLOSURES
31 December 2021
$
31 December 2020
$
Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total Liabilities
Net assets
Equity
Issued capital
Accumulated losses
Reserves
2,640,395
23,846,893
26,487,288
155,504
-
155,504
861,392
23,844,970
24,706,362
175,258
-
175,258
26,331,784
24,531,104
90,559,203
89,823,509
(64,227,419)
(65,339,287)
Share based payment premium reserve
Total equity
-
26,331,784
46,882
24,531,104
73
Financial performance
Profit/(Loss) for the period
Other comprehensive income
Total comprehensive income
31 December 2021
$
31 December 2020
$
137,780
-
137,780
(2,098,848)
-
(2,098,848)
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity has not entered into any guarantees in relation to the debts of its subsidiaries during the
year ended 31 December 2021.
Commitments for the acquisition of property, plant and equipment by the parent entity
The parent entity has no commitments for any acquisition of property, plant and equipment.
29. FAIR VALUE MEASUREMENT
In accordance with AASB 13, Fair Value Measurement, the group is required to disclose for each class
of assets and liabilities measured at fair value, the level of the fair value hierarchy within which the fair
value method is categorised. The group view that no assets or liabilities are measured at fair value, other
than cash, trade and other receivables, trade and other payables and borrowings with carrying amounts
assumed to approximate their fair value.
74
ANNUAL REPORT 2021 DIRECTORS’
DECLARATION
IN THE OPINION OF THE DIRECTORS OF VMOTO LIMITED:
a. the financial statements and notes, set out on pages 30 to 74, are in accordance with the Corporations
Act 2001, including:
i. giving a true and fair view of the financial position of the Group as at 31 December 2021 and its
performance, as represented by the results of its operations and cash flows, for the year ended on that
date; and
ii. complying with Australian Accounting Standards and the Corporations Regulations 2001.
b.
the attached financial statements also comply with International Financial Reporting Standards, as
stated in Note 1 to the financial statements; and
c.
there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001
from the Managing Director and the Finance Director for the year ended 31 December 2021.
Signed in accordance with a resolution of the Directors:
YITING (CHARLES) CHEN
MANAGING DIRECTOR
Dated at Western Australia,
this 30th day of March 2022.
75
AUDITOR’S INDEPENDENCE
DECLARATION
To the Board of Directors,
Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001
As lead audit Director for the audit of the financial statements of Vmoto Limited for the financial year
ended 31 December 2021, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
•
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
• any applicable code of professional conduct in relation to the audit.
Yours Faithfully
HALL CHADWICK WA AUDIT PTY LTD
MARK DELAURENTIS CA
Director
Dated Perth, Western Australia this 30th day of March 2022
76
ANNUAL REPORT 2021
INDEPENDENT AUDITOR’S
REPORT
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF VMOTO LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Vmoto Limited (“the Company”) and its subsidiaries (“the
Consolidated Entity”), which comprises the consolidated statement of financial position as at 31
December 2021, the consolidated statement of profit or loss and other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the year
then ended, and notes to the financial statements, including a summary of significant accounting
policies, and the directors’ declaration.
In our opinion:
a.
the accompanying financial report of the Consolidated Entity is in accordance with the
Corporations Act 2001, including:
(i)
giving a true and fair view of the Consolidated Entity’s financial position as at 31 December
2021 and of its financial performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
b.
the financial report also complies with International Financial Reporting Standards as disclosed
in Note 1(a).
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Consolidated Entity in accordance with the
auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
77
INDEPENDENT AUDITOR’S
REPORT
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Key Audit Matter
How our audit addressed the Key Audit Matter
Existence and valuation of inventory
(refer note 7)
The Consolidated Entity had an inventory balance of
$12,527,456 at year end, an increase of $8,039,733
from 2020.
Existence and valuation of inventory were considered
key audit matters due to:
Our procedures amongst others included:
• Attending stock takes conducted by affiliated firms
at year end and performing sample counts;
• During site visits we observed to consider
damaged or obsolete stock on hand;
•
•
The quantum and increase of inventory on hand
• Reviewing gross margins on sales during the year
The location of the inventory
on a monthly basis;
• Risk of stock obsolescence from changing
• For a sample of items we tested unit costs of
technology
• The importance of inventory in relation to
generating positive operating cash flows.
inventory items and related sales to supporting
documentation to assess whether the inventory is
held at the lower of cost and net realisable value
• Reviewing margins and inventory turnover via
analytical procedures; and
• Assessing the adequacy of the disclosures
included in Note 7 to the financial statements
Revenue Recognition
During the year ended 31 December 2021, the
Consolidated Entity generated sales revenue of
$86,167,219 (2020: $61,013,045).
We reviewed the Consolidated Entity’s revenue
accounting policy and their contracts with customers
and considered how management:
In 2018, the Consolidated Entity adopted AASB 15
Revenue from Contracts with Customers for the first
time. The core principal of the standard is that an
•
•
Identified the contract
Identified the performance obligations within the
contracts;
entity must recognise revenue to depict the transfer of
goods to customers in an amount that reflects the
consideration to which the entity expects to be entitled
in exchange for those goods or services. AASB 15
introduced a 5-step approach to revenue recognition
with prescriptive guidance with respect to the
identification of contracts with a customer, the
performance obligations in the contract, the
78
• Determined the transaction price;
• Allocated the transaction price to the
performance obligations
• Recognised revenue when the performance
obligation was satisfied
ANNUAL REPORT 2021
INDEPENDENT AUDITOR’S
REPORT
Key Audit Matter
How our audit addressed the Key Audit Matter
transaction price, the allocation of the transaction
price to the performance obligations and the
recognition of revenue when (or as) the entity satisfies
the performance obligation.
In addition to the above our procedures amongst
others included:
• We analysed the aging of trade receivables with
reference to trade terms; and
• We obtained aged receivables reports and
assessed the recoverability of debtors by
performing subsequent receipt testing, enquiry
with management, review of payment
arrangements and consideration of credit losses
incurred.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Consolidated Entity’s annual report for the year ended 31 December 2021, but does not
include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial report or
our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and
for such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error. In Note 1(a), the directors also state in accordance with Australian Accounting Standard AASB
101 Presentation of Financial Statements, that the financial report complies with International Financial
Reporting Standards.
In preparing the financial report, the directors are responsible for assessing the Consolidated Entity’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the
Consolidated Entity or to cease operations, or has no realistic alternative but to do so.
79
INDEPENDENT AUDITOR’S
REPORT
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Consolidated Entity’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Consolidated Entity’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor’s report to the related disclosures in the financial report or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Consolidated Entity to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Consolidated Entity to express an opinion on the financial report.
We are responsible for the direction, supervision and performance of the Consolidated Entity
audit. We remain solely responsible for our audit opinion.
80
ANNUAL REPORT 2021
INDEPENDENT AUDITOR’S
REPORT
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 31
December 2021. The directors of the Company are responsible for the preparation and presentation of
the remuneration report in accordance with s 300A of the Corporations Act 2001. Our responsibility is
to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
Auditor’s Opinion
In our opinion, the Remuneration Report of Vmoto Limited, for the year ended 31 December 2021,
complies with section 300A of the Corporations Act 2001.
HALL CHADWICK WA AUDIT PTY LTD
MARK DELAURENTIS CA
Director
Dated in Perth, Western Australia this 30
th
day of March 2022
81
ADDITIONAL SHAREHOLDER
INFORMATION
The following information is current as at 1 March 2022:
Voting Rights
The voting rights attaching to ordinary shares are that on a show of hands every member present in person
or by proxy shall have one vote and upon a poll each share shall have one vote.
Performance and service rights do not carry any voting rights.
Substantial Shareholders
The number of shares and options held by substantial shareholders and their associates who have provided
the Company with substantial shareholder notices are set out below:
Name of Substantial Shareholder
Number of Shares
20,805,3831
15,000,0002
13,952,8833
10,606,9484
8,823,5295
Yiting (Charles) Chen
Raymond and Susan Munro ATF Munro Family
Super Fund2
Ms Malaky Kazem
Xiaona Zhao
Xiaorui Ding
1. As lodged with ASX on 3 July 2019.
2. As lodged with ASX on 24 July 2019.
3. As lodged with ASX on 1 July 2021.
4. As lodged with ASX on 29 June 2017.
5. As lodged with ASX on 29 June 2017.
On-Market Buy Back
There is no current on-market buy back.
Distribution Schedules
Distribution schedules for each class of security as at 1 March 2022 are set out below.
82
ANNUAL REPORT 2021 FULLY PAID ORDINARY SHARES
Range
1
1,001
5,001
10,001
100,001
Total
1,000
5,000
10,000
100,000
Over
Holders
438
1,554
678
1,254
275
Units
246,762
4,295,483
5,475,294
42,248,185
227,094,360
%
0.09
1.54
1.96
15.12
81.29
4,199
279,360,084
100.00
DIRECTOR PERFORMANCE RIGHTS
Range
1
1,001
5,001
10,001
100,001
Total
1,000
5,000
10,000
100,000
Over
DIRECTOR SERVICE RIGHTS
Range
1
1,001
5,001
10,001
100,001
Total
1,000
5,000
10,000
100,000
Over
Holders
Units
-
-
-
-
2
2
-
-
-
-
5,907,289
5,907,289
Holders
Units
-
-
-
-
2
2
-
-
-
-
850,000
850,000
%
-
-
-
-
100
100
%
-
-
-
-
100
100
83
Securities subject to Voluntary Escrow
2,850,000 fully paid ordinary shares are currently subject to voluntary escrow until 17 March 2023.
970,000 fully paid ordinary shares are currently subject to voluntary escrow until 8 February 2024.
Unmarketable Parcels
Holdings of less than a marketable parcel of ordinary shares (being 1,280 Shares as at 1 March 2022):
Holders
599
Top holders
Units
433,398
The 20 largest registered holders of quoted securities as at 1 March 2022 were:
Rank
Name
Units
% Units
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
MR YITING CHEN
MR RAYMOND EDWARD MUNRO + MRS SUSAN ROBERTA
MUNRO
MS XIAONA ZHAO
MS MALAKY KAZEM
MR ERCHUAN ZHOU
CS THIRD NOMINEES PTY LIMITED
CITICORP NOMINEES PTY LIMITED
MR YI CHEN
MR TAO YU
OUTRIGHT INTERNATIONAL BUSINESS GROUP LIMITED
OUTRIGHT INTERNATIONAL BUSINESS GROUP LIMITED
MR LIANG CHEN
MR BRENDAN DAVID GORE
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR KAIJIAN CHEN
MR TU SHE
EDLINS PROSPERITY PLUS PTY LTD
BNP PARIBAS NOMINEES PTY LTD
MR JOSEPH WILLIAM RE
MR YIN HOW TEO
23,087,784
22,381,500
20,056,470
16,337,124
11,864,812
7,092,402
5,656,191
4,981,204
4,241,393
3,400,000
3,270,000
3,247,787
3,245,000
3,118,394
3,002,427
2,464,872
2,351,352
2,280,376
1,900,000
1,621,207
8.26
8.01
7.18
5.85
4.25
2.54
2.02
1.78
1.52
1.22
1.17
1.16
1.16
1.12
1.07
0.88
0.84
0.82
0.68
0.58
Top 20 holders of ORDINARY FULLY PAID SHARES (Total)
145,600,295
52.12
84
ANNUAL REPORT 2021 Unquoted Equity Security Holders
DIRECTOR PERFORMANCE RIGHTS
Rank
Name
MR YITING CHEN
MR YIN HOW TEO
1
2
Total
DIRECTOR SERVICE RIGHTS
Rank
Name
MR YITING CHEN
MR YIN HOW TEO
1
2
Total
Securities Exchange Quotation
Units
% Units
4,171,703
1,735,586
70.62
29.38
5,907,289
100.00
Units
% Units
600,000
250,000
70.59
29.41
850,000
100.00
The Company’s ordinary shares are listed on the Australian Securities Exchange (Code: VMT). The Home
Exchange is Perth.
Corporate Governance
The Company’s Corporate Governance Statement for the 2021 financial year can be accessed at:
http://www.vmoto.com/Download/Index?typeId=16
85
www.vmoto.com